Provider of Efficient and Effective Aviation Services · Conventions on aviation security to which Botswana is party and includes measures to address new and emerging threats against

Provider of Efficient and Effective Aviation Services

AFCAC African Civil Aviation Commission AGA Aerodromes and Ground Aids AIR Airworthiness of Aircraft AMEL Aircraft Maintenance Engineer’s LicenseAMHS Air Traffic Services Message Handling System AMO Approved Maintenance OrganisationANS Air Navigation Services ASFO Aviation Security Facilitation OfficerASIM Aviation Security Inspector Manual ASSO Aviation Safety Standards Oversight ATCO Air Traffic Controllers ATO Approved Training Organisations ATPL Airline Transport Pilot LicenceAVSEC Aviation Security ServiceCAAB Civil Aviation Authority of Botswana CATV Category V Ethernet cablingCCM Cabin Crew MemberCMA Continuous Monitoring ApproachCPL Commercial Pilot LicenceDAI Directorate of Accidents Investigation EI Effective Implementation EMS Environmental Monitoring System ERM Enterprise Risk ManagementESAF Eastern and Southern African RegionEU European UnionFIA Francistown International Airport FIDS Flight Information Display SystemFOO Flight Operations Officers IATA International Air Transport Association ICAO International Civil Aviation OrganisationICVM ICAO Coordinated Validation MissionKIA Kasane International Airport MIA Maun International AirportMTC Ministry of Transport and CommunicationsNCAFC National Civil Aviation Security Facilitation Committee NCASCP National Civil Aviation Security Certification ProgrammeNCASFC National Civil Aviation Security and Facilitation Committee NCASP National Civil Aviation Security Programme NCASQCP National Civil Aviation Security Quality Control Programme NCASTP National Civil Aviation Security Training Programme NOTAM Notice to AirmenOPS Aircraft operationsPMO Project Management OfficePPL Private Pilot LicenceSARPs ICAO Standards and Recommended Practices SARPs Standards and Recommended Practices SASO SADC Aviation Safety Organisation SPEDU Selibe Phikwe Economic Diversification Unit SSC Significant Safety Concerns SSKIA Sir Seretse Khama International Airport SSP State Safety Programme USAP Universal Security Audit Programme USOAP Universal Safety Oversight Audit Programme VPN Virtual Private Network

CAAB ACRONYMS …

PROVIDER OF EFFICIENT AND EFFECTIVE AVIATION SERVICESCIVIL AVIATION AUTHORITY OF BOTSWANAANNUAL REPORT 2015/2016

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1CORPORATEPROFILE


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Conventions on aviation security to which Botswana is party and includes measures to address new and emerging threats against civil aviation.

Some of the new and additional provisions of the Aviation Security Act are:

• Measures to enhance the effectiveness of the aviation security system in Botswana and the capacity of CAAB and other national security agencies to manage aviation security and respond to acts of unlawful interference with civil aviation;

• Measures for the protection of aircraft, aerodromes, passengers, crew members, ground personnel and air navigation installations against acts of unlawful interference with civil aviation;

• Prevention against acts of unlawful interference with civil aviation including hijacking, the use of aircraft as weapons, the infiltration of weapons or hazardous materials and other new and emerging threats and the acts of unruly or disruptive passengers at airports and on board aircraft; and

• Stricter penalties with the right deterrent effect to facilitate the effective enforcement of aviation security and the speedy resolution of security concerns.

The Civil Aviation Authority of Botswana (“CAAB”) is a Statutory Corporation established by the Civil Aviation Authority Act (CAP 71:04) of 2004. The continued existence of CAAB was provided for by the Civil Aviation Act, 2011 which repealed the previous Act establishing the Authority. CAAB is responsible for, amongst others, the regulation of air transport and enforcement of civil aviation regulations, the provision of air navigation services as well as the development and operation of airports and advising Government on civil aviation matters. Most of these functions were previously performed by the former Department of Civil Aviation (DCA). CAAB commenced full operations as an autonomous regulator on 1st April 2009.

VISION

To be a world class provider of safe, secure and sustainable aviation services.

MISSION

To effectively and efficiently regulate and promote a safe, secure and sustainable aviation industry in line with international standards and norms.

VALUES

CAAB commits to the following which will shape the culture of the organisation:

IntegrityAct with consistency of actions, values, methods, measures, principles, expectations and outcomes.

AccountabilityAct with responsibility in all interactions and are answerable for our decisions and actions.

CollaborationWork in unity and collaboration with our colleagues, partners and key stakeholders.

Customer FocusStrive for professionalism and serving customers to the best of our ability.

Continuous ImprovementWork to improve the way we did things before.

STRATEGIC OBJECTIVES

SafetyTo enhance safety in the Botswana Civil Aviation system.

SecurityTo enhance the Civil Aviation security system in Botswana.

EfficiencyTo enhance the efficiency of the Civil Aviation system in Botswana.

SustainabilityTo maintain sustainable development and operational continuity by aviation operations in Botswana.

Environmental ProtectionTo minimise any adverse impact on the environment by aviation activities.

CIVIL AVIATION LEGISLATION

Two important Civil Aviation enabling legislation are in force in Botswana. The Civil Aviation Act, 2011 and the Aviation Security Act, 2011 both became effective on 7th October 2011.

The Civil Aviation Act 2011 repealed and replaced the Civil Aviation Authority Act of 2004.

Many of the provisions in the 2004 Act have been re-enacted in the current Act including the establishment of the Civil Aviation Authority of Botswana

as an autonomous organisation responsible for the regulation of air transport and enforcement of civil aviation regulations, the provision of air navigation services as well as the operation and development of airports and advising the Government on civil aviation matters.

Some of the new and additional provisions of the Civil Aviation Act are:

• Establishment of a Directorate of Accident Investigation, separate from CAAB, to investigate aircraft accidents and incidents;

• Providing a regulatory framework for the licensing of air transport services to facilitate the implementation of air transport liberalisation in Botswana;

• Enhancing and clarifying further, the role of the Appeals Tribunal to review the regulatory decisions of CAAB; and

• Stricter penalties to facilitate the effective enforcement of civil aviation regulations.

The 2011 Aviation Security Act designates CAAB as the appropriate authority responsible for aviation security in Botswana. The Act updates and modernises the existing enactments relating to aviation security, brings into force provisions of International

CORPORATEPROFILE…


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The Authority commenced full operations on 1st April 2009 as a statutory Corporation under the Ministry of Transport and Communications (MTC). The Civil Aviation Authority of Botswana (CAAB) was established by the Civil Aviation Authority Act, 2004 (CAA Act, 2004) which mandated CAAB to promote aviation safety and security and ensure the regular and efficient use and development of Civil Aviation in Botswana.

GROWTH ENABLING PROSPECTS

Aviation being a complex and highly regulated business, calls for discussion between governing and regulatory bodies; and development of appropriate infrastructure. In this regard, Botswana has in the past few years signed bilateral agreements with other countries to facilitate the growth of the industry.

BILATERAL SERVICE AGREEMENTS (BASA)

Bilateral air service agreements are concluded between two contracting countries to liberalise commercial civil aviation services between those countries. The bilateral air services agreements allow for designated airlines of those countries to operate commercial flights that cover the transport of passengers and cargo between the two countries.

The Air Service Agreement also regulates frequency and capacity of air services between countries, pricing and other commercial aspects. CAAB has concluded these with 23 states worldwide.

SAFETY MANAGEMENT SYSTEM AND ICAO COORDINATED VALIDATION MISSION

The Civil Aviation Authority of Botswana is committed to enhancing the level of safety in Botswana. Botswana has an accident track record which is above the Eastern and Southern African Region (ESAF) average.

The Authority is on a continuous drive to improve its services especially in the area of Aviation Safety e.g. guidance material on the implementation of Safety Management System has been distributed to all stakeholders.

This will provide for regular exchange of safety data and other safety oversight information.

The 2015 International Civil Aviation Organisation Coordinated Validation Mission (ICVM) has put Botswana‘s rating at 71.32% of Effective Implementation compared to 53.78% in 2013.

71.32%

9753000

Botswana‘s rating of Effective Implementation by ICVM (ICAO Coordinated Validation Mission)

MaunInternationalAirport capacity

Kasane International Airport runway extension

per peak hour

metres

GOVERNANCE

The Civil Aviation Authority of Botswana is a statutory corporation reporting to the Minister responsible for civil aviation, currently being the Minister of Transport and Communications. He is the Aeronautical Authority of Botswana, with the power to give written directions to CAAB and to delegate some of his or her functions to the Authority.

CAAB is governed by a nine-member Board tasked with responsibility for the general control and guidance on the performance and management of the undertakings and affairs of the Authority.

The Civil Aviation Authority of Botswana strives to apply the overarching corporate governance principles of fairness, accountability and transparency and has adopted various measures and practices consistent with best practice and implements the recommendations of various governance codes around the world.

A formal induction programme is arranged for new Board Members. Board Members are appointed for a maximum term of 3 years and are eligible for reappointment.

RULE OF LAW

To enact and/or promulgate legal instruments as they become necessary.

The Civil Aviation Act further authorises the Authority to provide and charge for the following:

• Safety• Inspection of Aircraft• Inssuance, renewal or variation of Personnel Licenses• Aircraft landing• Aircraft parking• Air navigation and communications• Fuel handling• Passenger services• Air operator’s certificate• Approval of aircraft maintenance organisations• Noise and environmental pollution• Air transport licenses• Traffic handling• Aircraft handling• Use or rental of any assets of the authority• Any other services related to the operation of aerodromes.

ORGANISATIONAL HISTORY…

ORGANISATIONAL HISTORY [CONTINUED]

…


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GLOBAL AVIATION& TOURISM TRENDS…

447,500Airport operators(work for the airport operator)

5,468,000Other on-airport(retail, car rental, government agencies such as customs and immigration, freight forwarders and some catering)

2,669,000Airline sta�(flight and cabin crews, executives, ground services, check-in, training, maintenance sta�)

1,101,000Civil aerospace sta�(engineers and designers of civil aircraft, engines and components)

224,000Air navigation service providers(air tra�c controllers, executives)

Asia-Pacific in frontRegional passenger tra�c split

DIRECT JOBS

Beyond the industry

All figures are for 2014, unless otherwise stated, to give a single set of data for one year. Where available, the latest figures are also noted. These should be viewed as a snapshot of the aviation sector in 2014 and not as part of a trend. Although previous Aviation: Benefits Beyond Borders reports have used the same economic impact technique, di�erences in data sources available between years mean many of the annual reports are not directly comparable.

These figures represent a snapshot of the benefits that aviation activities deliver to the global economy. They do not include other economic benefits of aviation, such as the jobs or economic activity generated when companies or whole industries exist because air travel makes them possible. Neither do they include the intrinsic value that the speed and connectivity of air travel provides, or domestic tourism and trade. Including these would increase the employment and global economic impact numbers several-fold.

The world of air transport, 2014

3.5% of global GDP supported by aviation

62.7MILLION

Jobs supported by aviation worldwide

3.3 BILLION Passengers carried by airlines (in 2015, 3.57 billion passengers were carried)

$2.7 TRILLION

Aviation’s global economic impact (including direct, indirect, induced and tourism catalytic)

21st

3.8x

If aviation were a country, it would rank 21st in size by GDP

Aviation jobs are, on average, 3.8 times more productive than other jobs. By opening markets, enabling knowledge transfer and other catalytic e�ects, aviation also makes jobs in other sectors more productive

$664.4 billion

$2.7 trillion

Aviation direct

Indirect

Induced

Tourism catalytic

$761.4 billion

$355 billion

JOBS

9.9 million

62.7 million

11.2 million

5.2 million

36.3 million $892.4 billion

GDP

Asia-Pacific

North America

Middle East

Europe

Latin America & Caribbean

Africa

33%

26%

25%

8%

5% 3%

Aviation’s global employment and GDP impact, 2014

54%of international tourists travel by air

32.8 MILLION Commercial flights worldwide (in 2015, there were 34.8 million flights)

CLIMATE TARGETS

Improve 1.5%Aviation will improve its fleet fuel e�ciency by an average of 1.5% per annum between 2009 and 2020, a figure the industry is currently exceeding

StabiliseFrom 2020, net carbon emissions from aviation will be capped through carbon-neutral growth

Reduce 50%By 2050, net aviation carbon emissions will be half of what they were in 2005

ENVIRONMENTAL PROGRESSThe air transport industry has made significant progress in reducing its environmental impact:

CO2 emissions per seat kilometre 70%+ since first jet aircraft

Perceived noise 75%+ since first jets

Over nine billion tonnes of CO2 avoided since 1990 through a combination of new technology, operational e�ciencies and infrastructural improvements, including airlines spending $3 trillion on over 25,000 new aircraft

The industry has invested in new technology, better operations and infrastructure improvements

Civil aerospace spends $15 billion per year on e�ciency-related R&D

Sustainable aviation fuels could reduce the sector’s CO2 footprint by as much as 80%. Over 2,200 commercial flights have taken place so far

Air tra�c management modernisation could save millions of tonnes of CO2

1,402 Commercial airlines 35%

Air transport carries around 35% of world trade by value ($6.4 trillion in 2014) and less than 1% by volume

739 MILLION

Tonnes of carbon dioxide (CO2) emitted by airlines

(in 2015, it was 781 million tonnes). This is 2% of the global human emissions of 36 billion tonnes. Around 80% of aviation CO2 is emitted from flights over 1,500 kilometres in length, for which there is no practical alternative form of transport

173 Air navigation service providers

26,065 Commercial aircraft in service

3,883 Airports with scheduled commercial flights (there are 41,788 airfields in the world, including military and general aviation)

Proportion of global trade transported by air

High value, time sensitive

By value34.6%

By volume

0.5%51,554Routes served globally in 2014 (in 2015 the number was 52,964). Of these, 17,370 unique city-pairs are served

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AVIATON BEYOND BORDERS - GLOBAL SUMMARY JUNE 2016

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2CHAIRMAN’SREVIEW


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CHAIRMAN’SREVIEW…

Another financial year has gone by and I, once again, have the pleasure and privilege to make this statement, this time as part of the Civil Aviation Authority of Botswana

(CAAB) Annual Report for the year 2015/2016. CAAB’s continued recognition that it is a significant driver of other sectors of the economy was a factor in its growth during the period under review. In this regard, it was gratifying to note that CAAB made strides in achieving the objective for which it was established which is to promote the safe, regular, secure and efficient use and development of civil aviation in the country.

In the fulfilment of its mandate of providing strategic direction and leadership including setting goals and objectives for the organisation, the Board approved a Strategic Plan covering the period 2015 - 2020 during the period under review. As part of the process in the development of the Strategic Plan, a detailed review of the internal and external environment, which enabled the Authority to identify a SWOT analysis, was undertaken. The process entailed extensive consultations with stakeholders to ascertain their expectations and receive inputs. The Strategic Plan defines the Strategic Foundations of the Authority in terms of its Vision, Mission and Values. It also sets out CAAB’s Strategic Intent which is to transform the Authority into an effective and innovative regulator that contributes to the development of a sustainable and environmentally friendly aviation industry by investing in its human capital and increasing its revenue base, thus reducing Government subventions.Following the approval of the Strategic Plan, CAAB signed a Shareholder Performance Agreement (Shareholder Compact) with the Government of Botswana represented by the Ministry of Transport and Communications. The purpose of the Shareholder Compact is to enhance the productivity and governance of CAAB through an effective relationship between CAAB and the Government as the Shareholder. The Shareholder Compact defines the mandate from the Shareholder to the Board and to inform the Board of the Shareholder’s objectives and expectations. The Compact also sets out certain undertakings required from the Shareholder by the CAAB Board and Management.

The Board held meetings to address key issues affecting the Authority as required under the Civil Aviation Act, 2011. However, the regularity of meetings of Board Committees was affected by vacancies in the membership of the Board which took some time to be filled. This notwithstanding, the observance of good corporate governance was not affected as the Authority continued to adhere to applicable good corporate governance principles such as transparency, accountability and fairness which have been incorporated onto the Strategic Plan.

The development and modernisation of major airports continued during the period under review. Notably, the development of the Sir Seretse Khama International Airport passenger terminal building was completed and the terminal building was officially opened by His Excellency the President Lt. General Dr. Seretse Khama Ian Khama on 16th October 2015. Works for the improvement of Maun and Kasane International Airports, entailing the construction of a new Air Traffic Control Tower and Equipment Room in Maun; a passenger terminal building; an Air Traffic Control Tower and Equipment Room in Kasane, continued during the period under review.

CAAB achieved its mandate during the year 2015/2016 largely due to the unwavering commitment of the Board, Management and staff of CAAB as well as the support of the aviation industry in Botswana. I am particularly pleased that, following a huge amount of hard work, the Country was able to come out of the Significant Safety Concerns (SSCs) situation resulting from an assessment by the International Civil Aviation Organisation (ICAO) Coordinated Validation Mission (ICVM) of 2013. My sincere thanks therefore go to everyone who played a role in the work that was carried out to achieve this important milestone.

In conclusion, I would like to thank members of the CAAB Board, past and present, whose support was instrumental in providing leadership and support to Management and staff. My thanks could be incomplete without special mention of the Ministry of Transport and Communications which went a long way to enable CAAB to fulfil its mandate.

Mark John SampsonChairman


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The Board works through Committees to ensure that matters receive closer scrutiny while improving the effectiveness and pace of high level decision making. The current Board and Committee composition is set out below:

1. MARK JOHN SAMPSON BOARD CHAIRMAN

Captain Mark John Sampson was first appointed Chairman of the Civil Aviation Authority of Botswana’s in April 2011. Captain Sampson is a veteran Pilot having received his wings in1974. He became an airline Captain in 1980 and was one of the first citizens to get this qualification. Captain Sampson has 16 000 hours flying and has been an Advanced Flight Instructor for twenty (20) years.

2. ANTHONY GLYNDWR REES BOARD MEMBER

Mr Anthony Glyndwr Rees is a Chartered Civil Engineer and a Fellow of the Chartered Institute of Highways and Transportation. Mr Rees is the Managing Director and sole shareholder of Haas Consult-SRA (Pty) Ltd. He has over 50 years professional experience as Resident Engineer, Roads Engineer Geotechnical/Materials Engineer and Project Manager/Director for numerous construction projects and new roads projects throughout Africa. He holds a BSc (Hons) from the University of Wales.

3. ONALENNA SECHELE BOARD MEMBER

Ms Onalenna Sechele was appointed in the CAAB Board as the mother Ministry of Transport and Communications representative on 1 January 2016. She is Deputy Permanent Secretary, Ministry of Transport and Communication responsible for Transport.

He was appointed Deputy Permanent Secretary for Transport on 1 September 2015. With a civil service career spanning over 16 years, her responsibilities as Deputy Permanent Secretary - transport include and not limited to Strategic Planning for the entire transport sector, overseeing of project for the sector including those of the Ministry’s Parastatals.

Ms Sechele completed a post Graduate Certificate in Telecommunication Regulation and Masters in Communications Policy with a dissertation in Exploring Synergies that exist between the Postal services, Telecommunication and ICT.

4. LT. GENERAL TEBOGO MASIRE (RTD) BOARD MEMBER

Lt. General Tebogo Masire (Rtd) is the former Commander of the Botswana Defence Force. He retired from the military in July 2012 after 5 years as the Commander of the Defence Force. He joined the Civil Aviation Authority of Botswana Board in 2013.

An avid Aviator, Lt. General Masire has over 4000 flying hours on fixed wing and helicopters. His flying career has taken him to over 35 countries as a pilot. Lt General Masire first worked for the Department of Civil Aviation (a Precursor of the CAAB) as an Air Traffic Controller before joining the Botswana Defence Force at its inception in 1977, as an Officer Cadet.

During his 35 year illustrious military career, Lt. General Masire held various operational, staff and command appointments. He reached the pinnacle of his career in 2006 when he was appointed Commander of the BDF - making him the Fourth to ever hold that position. Some of the major developments during his command include the induction of the first female officers in 2007 and the establishment of the Defence Command Staff College.

Lt. General Masire is a graduate of the Air Force Command and Staff College and Naval Postgraduate School. He is an International Honour Roll Inductee of the US Air University. He holds a Diploma and BSc from Troy State University and an MBA from University of Southern Queensland, Australia.

5. MOTEBELE RASHIMI SENTLE BOARD MEMBER

Mr Motebele Rashimi Sentle was appointed to the CAAB Board in 2013. Mr Sentle is a retired Air Traffic Controller having served the Department of Civil Aviation as an Air Traffic Controller from 1975 to 2010 when he retired. At his retirement, he held the position of Chief of Air Traffic Services. Mr Sentle is a pioneer Air Traffic Controller and was one of the first citizen qualified Controllers. He previously acted for more than a year as Director of Civil Aviation.

6. THEMBINKOSI JOHNSON BOARD MEMBER

Thembinkosi Johnson is a pilot by Profession. He joined the Military, Botswana Defence Force in 1987. He retired from active military at a rank of Lt Colonel in October 2011 after 24 years of active service.

A helicopter Pilot, Mr Johnson qualified as a pilot in April 1990. In 1994, four years after qualifying as a pilot he became a qualified Flying Instructor. In January 1990, he was appointed a Squadron Commander. He later, in 2006, joined the VVIP squadron as Chief Helicopter Pilot.

Currently running Defence and Aviation Services, a consultancy company that deals with Defence procurement and associated Aviation services, he was appointed to the Civil Aviation Authority Board in February 2016.

7. ASAD PETKAR BOARD MEMBER

Mr Asad Petkar is currently the Chief Operating Officer and a shareholder at EOH Consulting, a management consultancy firm. He joined the Civil Aviation Authority of Botswana Board in January 2016.

Throughout his career spanning over 15 years, Mr Petkar has focused on developing and applying innovative solutions in a number of areas that focused on Corporate Performance Improvement.

His consulting experience has covered a number of areas in strategy development, audit and execution training and project management amongst others.

Asad Petkar is a fellow of the Advanced Performance Institute (API), which provides research, consulting and training in Performance Management to organisations globally. In addition, he is a Certified Balanced Scorecard Practitioner.

A Master in Commerce (Information Technology) graduate, has served on a number of Boards.

8. GEOFFREY PUSELETSO MOSHABESHA CEO AND EX OFFICIO BOARD MEMBER Geoffrey Puseletso Moshabesha assumed duty as Chief Executive Officer of the Civil Aviation Authority of

Botswana on 5th January 2015. Mr Moshabesha has 45 years’ experience in the aviation industry. He served his native country, Lesotho, as Director of Civil Aviation before joining the International Civil Aviation Organisation (ICAO) at its Head Office in Montreal, Canada and as well as ICAO Regional Office (Nairobi, Kenya) as Director for the Eastern and Southern Africa Region. He served ICAO for a cumulative period of over 15 years. An aviation expert, Mr Moshabesha has also been a Civil Aviation Management Adviser to the various Southern African Governments including Botswana, Mozambique and Zambia. He holds both a BSc (Aviation Administration) and MBA (Aviation Administration) all acquired from the Embry Riddle Aeronautical University, Florida, USA.

BOARDMEMBERS [CONTINUED]

…

BOARDMEMBERS…


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Mark John Sampson

Board Chairman

Anthony Glyndwr Rees

Board Member

Onalenna Sechele

Board Member

Motebele Rashimi Sentle

Board Member

Lt. General Tebogo Masire (Rtd)

Board Member

Thembinkosi Johnson

Board Member

Asad Petkar

Board Member


…


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PROVIDER OF EFFICIENT AND EFFECTIVE AVIATION SERVICES

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CIVIL AVIATION AUTHORITY OF BOTSWANAANNUAL REPORT 2015/2016

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3CHIEF EXECUTIVEOFFICER’S REVIEW


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I wish to present the mandatory report on the operation of the Civil Aviation Authority of Botswana (CAAB) for the Financial Year beginning April 2015 to March 2016. During

the year under review, as it will be demonstrated in the entire body of this report, we have recorded the highest safety record Botswana has ever achieved in its entire 50 years as a sovereign state. A feat which has by-passed the Africa Region’s and the world’s safety average. This has been achieved through the concerted efforts of our shareholder, the Board and indeed those who serve the Organisation on a full-time basis - the employees.

The long awaited implementation of the organisational structure was completed in August 2015. We had anticipated that Phase II of the implementation of the structure would be completed by December 2015. However, this was not finalised, and we are committed to closing this matter during the next review period.

During the implementation of this project, we have appreciated that job profiling, which includes Jobs analysis and Job evaluation processes, was a critical task which required urgent attention for CAAB to position it’s self as an employer of choice in the industry.

This review of the organisational structure has included performance management contracts for staff. It will ensure that contracts are tied to the objectives of the Authority as outlined in the Strategic Plan. The aim is to proactively change the way business has been conducted in the Authority while ensuring that everyone is accountable and delivers as prescribed. Despite the various challenges during the transition, CAAB’s staff continued to serve the country with pride. I must thank all of the staff for diligently performing their tasks during this challenging time in our history.

During the period under review, the Board and the shareholder, the Government, approved the Strategic Plan covering the period 2015 - 2020. CAAB now has an ambitious and transformative plan which is aimed at converting the Authority into a higher performing entity. The Plan has identified eight areas under its change agenda. These being Financial Sustainability and Growth; Leadership and Culture; Governance, Risk and Compliance; Stakeholder Management; Talent Management; Infrastructure and Operational Efficiency;

Branding of the Authority and Organisational Structure rationalisation. This strategy will be rolled out and cascaded to all staff members in the New Year.

The country underwent an ICAO Coordinated Validation Mission (ICVM) in December 2015. Following the validation, ICAO lifted the two Significant Safety Concerns (SSCs) identified during an ICVM of May 2013. The Validation mission also revealed that the country improved in effective implementation of ICAO Standards and Recommended Practices (SARPs) from 53.78 % to 71.32%.

On Infrastructure Development, the long awaited improvement of the Sir Seretse Khama International Airport (SSKIA) terminal building was completed and handed over to the Authority during this review period.

The introduction of Ethiopian Airlines into SSKIA was yet another welcomed development which shows the confidence of the industry in the Country’s infrastructure.

During this review period, maintenance works done included dry-grading works, fog spraying, runway resurfacings and markings at a number of the strategic airfields throughout the country.

The construction of the new state-of-the-art terminal building at the Kasane International Airport with all the environmental considerations is progressing well and completion is expected in the next financial year. The completion of these Infrastructure works will bring to 3 out of 4 of our recently re-developed International airport’s terminal buildings.

CHIEF EXECUTIVE OFFICER’S REVIEW…


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CHIEF EXECUTIVE OFFICER’S REVIEW [CONTINUED]

…Work on the construction of the Air Traffic Controller tower and Technical Block at the Maun International Airport is on schedule and is planned for completion during the next reporting period. Once completed, the old Tower will be turned into a Fire and Rescue workshop.

The Selibe Phikwe Airport runaway was completed during the year under review through the partnership of CAAB and the Selibe Phikwe Economic Diversification Unit (SPEDU).

As improvements of infrastructure continue to enable connecting communities, the assessment of the utilisation of the facilities against the investments was conducted. In this regard, passenger movements during the period under review indicated a combined total of 727 912 passengers travelling through Sir Seretse Khama International Airport (SSKIA), Maun International Airport (MIA), Kasane International Airport (KIA) and Francistown International Airport (FIA).

The above figures represent a decrease of 1.7% compared to 740 733 passengers that were recorded in the previous year (2014/15). Domestic traffic made up 43% of the total, a slight decrease from the 44.4% it accounted for in the previous reporting period.

International traffic recorded in the year under review was 415 624, an increase of 0.7 % year on year. SSKIA is the only airport that recorded passenger increase this year, with a growth of 2.2% from the 378 752 that was registered in the year 2014/15. The increase is attributed to scheduled movements, since the introduction of Ethiopian Airlines flights effective from 30 June 2015, with its services between Addis Ababa and Gaborone. Regrettably, our other three main airports recorded decreases in comparison to the last reporting period.

During the review period, in pursuant of safe flying over national airspace, through our provision of air navigation services and to enhance the safety of our skies, the implementation of the Air Traffic Services Message Handling System (AMHS) and ICAO Flight Plan were completed on the 12 February 2016; and the improvement of communication in the lower airspace project was completed.

The CAAB has also played an important role with regard to supporting Tourism, which is one of Botswana’s key industry sectors. Besides maintaining international best practice at all the facilities, the Organisation’s continued partnership With aviation events such as the Wesbank Botswana International Airshow based at Matsieng Air Strip in Rasesa. CAAB contributes to keeping the country on the international calendar for leisure aviation events.

Financially, the above projects and the drive to be internationally compliant with the ICAO requirements means that the Authority’s operational costs continue to increase. The Authority strives to assist the shareholder in achieving the diversification of the country’s economy by connecting communities. We therefore, wish to express appreciation of the stewardship of the Board and the support of the Shareholder in realising these achievements.

Geoffrey P MoshabeshaChief Executive Officer

EXECUTIVETEAM…

The Executive Management Team (EMT) executes the strategic objectives and implements policies as set by the Board. EMT is headed by the Chief Executive Officer, and consists of Directors of the following Directorates:

Head of Human Capital and Administration, Finance, Airports, Air Transport, Flight Safety, Corporate Secretariat and Air Navigation Services.

CAAB has an internal audit function reporting administratively to the CEO and functionally to the Board and the Finance and Audit Committee.

An Internal Audit Charter that reaffirms the independence of the audit function has been approved by the Board. The Authority’s accounts are audited by an Auditor appointed by the Board in terms of Section 37 of the Civil Aviation Act 2011.

CAAB consults with stakeholders from time to time on matters such as legislation, regulatory requirements, charges and other matters of interest to various players in the aviation industry.

Though wholly owned by the Government of Botswana, CAAB is administratively autonomous.

CAAB’s operational and financial oversight is achieved through a series of statutory requirements including the obligations to produce a 5 year business plan, audited statements for each financial year, annual budget and an annual report.

The financial year runs from 1st April of one year to 31st March of the following year. CAAB is preparing to enter into a performance agreement with the Government, one that will enhance its capacity to meet the operational and financial targets set out in the Business Plan.

1. MR. GEOFFREY PUSELETSO MOSHABESHA CHIEF EXECUTIVE OFFICER

2. MR. DAVID FANI CORPORATE SECRETARY

3. MR. SILAS SILAS DIRECTOR, AIR NAVIGATION SERVICES

4. MR. JUSTICE MASOLE DIRECTOR, AIRPORTS

5. MR. KABO PHUTIETSILE DIRECTOR, AIRPORTS ENGINEERING & MAINTENANCE

6. MRS. BOITUMELO WADIKONYANA HEAD, HUMAN CAPITAL & ADMINISTRATION

7. MRS. MPHO MPHAFE-FISH DIRECTOR, FINANCE


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EXECUTIVETEAM [CONTINUED]

…

Geoffrey Puseletso MoshabeshaChief Executive Officer

EXECUTIVETEAM [CONTINUED]

…

David Fani Corporate Secretary

Silas Silas Director, Air Navigation Services

Boitumelo Wadikonyana Head, Human Capital & Administration

Mpho Mphafe-Fish Director, Finance

Justice Masole Director, Airports

Kabo Phutietsile Director, Airports Engineering & Maintenance


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727 912 passengers travelling through Sir Seretse Khama International Airport (SSKIA), Maun International Airport (MIA), Kasane International Airport (KIA) and Francistown International Airport (FIA).

The above figures represent a decrease of 1.7% compared to 740 733 passengers that were recorded in the previous year (2014/15). Domestic traffic made up 43% of the total, a slight decrease from the 44.4% it accounted for in the previous reporting period.

International traffic recorded in the year under review was 415 624, an increase of 0.7 % year on year. SSKIA is the only airport that recorded passenger increase this year, with a growth of 2.2% from the 378 752 that was registered in the year 2014/15.

This represented a significant improvement, placing Botswana above both the African average of 48.24% and the world average of 64.44%, evidence that Botswana has one of the safest skies in the world.

727 912passengers travelling through Sir Seretse Khama International Airport (SSKIA)

CAAB 2015/16 …

119 842 Total flights in

Botswana Airspace

55 662Domestic arrivals/

departures

19 466 International

arrivals/departures

44 714 Over flights

0.7% Increase

2.2%SSKIA growth Arrivals

378 752


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4OVERSIGHT ANDCOMPLIANCE


30 \\ // 31

INTRODUCTION

CAAB is both a regulatory body and service provider on matters pertaining to civil aviation in the country. As a regulatory body, CAAB provides Safety and Security Oversight functions on behalf of the State. This is on the basis that Botswana, as a Contracting State of the International Civil Aviation Organisation (ICAO), has an obligation to provide safety and security oversight functions.

States execute such safety and security oversight responsibilities by establishing oversight organisations which are staffed with inspectors in various specialty fields such as Aerodromes and Ground Aids (AGA), Air Navigation Services (ANS), Airworthiness of Aircraft (AIR), Aircraft Operations (OPS) and Aviation Security. These inspectorate units audit, inspect and check various facilities, equipment, operational procedures and personnel for the purpose of certificating, licensing, authorising and approving them to be engaged in safe aviation related activities.

INTERNATIONAL CIVIL AVIATION ORGANISATION COORDINATED VALIDATION MISSION (ICVM)

The country was subjected to an International Civil Aviation Organisation (ICAO) Coordinated Validation Mission (ICVM) under the ICAO Universal Safety Oversight Audit Programme (USOAP) in December 2015; as a follow up to the 2013 ICVM that identified two Significant Safety Concerns (SSCs). During the ICVM that was carried out in December 2015, CAAB achieved an aviation safety oversight Effective Implementation (EI) of 71.58% up from 53.78% in the year 2013, surpassing the international EI average of 68%.

As a result of the level of Effective Implementation (EI), and as recommended by ICAO for countries which have attained an EI of 60% and above, the CAAB has embarked on the implementation of a State Safety Program. The program aims to ensure that States either sustain or improve their level of implementation.

Following the resolution of the SSCs there has been an increase in activities in the aviation sector with four Maintenance Organisations, Three Training Organisations and Two Air Operators applying for certification. It is anticipated that there is going to be an increase in investors’ interest in the aviation industry of Botswana.

AVIATION SAFETY SERVICES

The Aviation Safety Directorate of the Authority exists to implement the safety oversight requirements of the International Civil Aviation Organisation (ICAO), a United Nations (UN) agency established in 1947 as contained in the Articles of the Chicago Convention and its Standards and Recommended Practices (SARPS) found in the Annexes to the Convention within the following three functions;

• Personnel Licensing and Training (ICAO Annex 1),• Flight Operations (ICAO Annex 6), and• Airworthiness of Aircraft (ICAO Annex 8).

OVERSIGHTAND COMPLIANCE …

OVERSIGHTAND COMPLIANCE [CONTINUED]

…PERSONNEL LICENSING AND TRAINING

Personnel Licensing and Training carries out all of the safety oversight responsibilities assigned by the Civil Aviation Act and its Regulations, as well as ensuring that Botswana fulfils its obligations under the Convention on International Civil Aviation. This function performs the Civil Aviation Authority obligations of maintaining regular safety oversight of all personnel licensing and training aspects of aviation in Botswana, which includes;

• Certification and surveillance of air operators, approved maintenance organisations.• Approved training organisations and oversight of any other person or organisation involved in the operation of

aircraft.• Maintenance/modification/repair of aircraft and training aspects of personnel engaged in civil aviation. • Licensing/approval of maintenance personnel, pilots, cabin crew members, flight operations officers, air traffic

controllers, designated aviation medical examiners and remotely piloted aircraft.

FLIGHT OPERATIONS

This function performs the Authority’s obligations of maintaining regular safety oversight of the operation of aircraft (both commercial and private) in the Country. These obligations include, the certification and surveillance of air operators, aerial work organisations, approved training organisations and oversight of any operation of aircraft engaged in civil aviation. Flight Operations carries out all of the safety oversight responsibilities assigned by the Civil Aviation Act and its Regulations as well as ensuring that Botswana fulfils its obligations under the Convention on International Civil Aviation.

AIRWORTHINESS OF AIRCRAFT

Air worthiness obligations are to maintain regular safety oversight of the maintenance and continuing airworthiness of aircraft operating in Botswana, which includes certification and surveillance of air operators, approved maintenance organisations, approved training organisations and oversight of any organisation involved in the operation of aircraft, maintenance/modification/repair of aircraft engaged in civil aviation. The Airworthiness function carries out all of the safety oversight responsibilities assigned by the Civil Aviation Act and its Regulations as well as ensuring that Botswana fulfils its obligations under the Convention on International Civil Aviation.


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AVIATION SAFETY OVERSIGHT STATISTICS

AIRWORTHINESS STATISTICS UNDER THE REVIEW PERIOD

S/N Type of Activity Total # Issued

01. Aircraft Registration 15

02. Aircraft Deregistration 8

03. Export Certificate of Airworthiness (C of A) 8

04. Issue and Renewal of C of As 165

05. Mode of Transponder Registration 6

06. Special Flight Permits Issuance 12

07. Approval of Major Repairs & Modifications 28

08. Foreign AMO Approvals & Validations 6

09. Renewals of Local AMO Approvals 0

10. Local AMOs Recertification 2

11. Validation of Foreign Permit to Fly 132

12. Issue and Renewal of Local Permit to Fly 16

FLIGHT OPERATIONS STATISTICS

S/N Type of Activity Total # Issued

01. Approval (Re-certification) of local Air Operator (Balloon certification at phase 3) 1

02. Renewal of local Air Operator 12

03. Validation of Foreign Air Operator 4

04. Renewal of Foreign Air Operator 1

05. Aerial work Operator 1

06. Surveillance on local Air Operators 55

07. Surveillance on Foreign Air Operators 15

08. Surveillance on Aerial work operator 0

09. Development of Technical Guidance Material 2

10. Closure of ICAO corrective action plan 10

AVIATION SAFETY OVERSIGHT STATISTICS (CONTINUED)

PERSONAL LICENSING

Licences Total Issued Issued in 2015/16 Current

Private Pilot Licence (PPL) 537 58 203

Commercial Pilot Licence (CPL) 1031 92 300

Airline Transport Pilot Licence (ATPL) 304 8 98

Cabin Crew Member (CCM) 44 30 43

Air Traffic Controllers (ATCO) 108 54

Flight Operations Officers (FOO) 8 8 8

Aircraft Maintenance Engineer’s License (AMEL) 114 15 103

BOTSWANA DESIGNATED EXAMINERS

Designated Examiners Total Issued Issued In 2014/15 Current

Pilots 83 25 29

Cabin Crew Members 3 3 3

Aviation Medical Examiners 8 6 7

Aviation Medical Assessor 1 1 1

Aircraft Maintenance Engineer 1 1 1

APPROVED TRAINING ORGANISATIONS (ATOS) DURING THE UNDER REVIEW

Atos Foreign ATOS Local ATOS Issued in 2014/15

Total 8 0 8


…


…


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…AVIATION SAFETY STANDARDS OVERSIGHT (ASSO)

MANDATE

The mandate of Aviation Safety Standards Oversight (ASSO) is to regulate the provision of air navigation services, and the establishment and operation of civil aerodromes in the country in order to ensure that air navigation services and aerodromes operation functions are safely and efficiently executed, with a view to upholding and implementing ICAO standards and recommended practices (SARPs). THE FUNCTIONS

ASSO exists primarily to conduct safety oversight functions in the country, to ensure safe operations with regard to the provision of air navigation services (ANS) and aerodromes and ground aids (AGA).

The above functions entail the following:

• Carrying out of certification, licensing, authorising and approval of air navigation service providers in accordance with National Regulations, policies and procedures; and in compliance with ICAO Standards and recommended practices (SARPs);

• Carrying out of inspection activities of certificated, licensed, authorised or approved air navigation services facilities and personnel to ensure adherence prescribed conditions.

• Carrying out investigations on incidents and make appropriate recommendations for improvement to the service providers.

• Responding appropriately to relevant State letters from ICAO or giving advice to the Chief Executive Officer and/or other senior managers of the necessary action by the Authority.

• Working out responses to enquiries emanating from interventions by other regional and/or global organisations such as SADC, ICAO or the European Union.

• Undertaking any duties assigned as a response to regional and/or global organisations like SADC Aviation Safety Organisation (SASO), African Civil Aviation Commission (AFCAC) or International Air Transport Association (IATA).

• Ensuring resolution of safety concerns in keeping with the enforcement policy and procedures following inspection activities of the industry.

There are four (4) major aerodromes, twenty three (23) minor government airfields, sixty eight (68) privately owned aerodromes and one (1) air navigation service provider proving air traffic control services and alerting services at the four major aerodromes in the country.

OUR CHALLENGES

• Insufficient number, mix and appropriately qualified inspectors; and • Insufficient funding leading to deficiency in the number of inspector activities of service providers.


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AVIATION SECURITY AND FACILITATION OVERSIGHT (ASFO) (CONTINUED)

A number of existing programmes were reviewed and new ones developed; and approved by the Committee. Programmes which were reviewed and/or developed were as follows:

a. National Civil Aviation Security Programme (NCASP), 2016 - Revised from the 2012 edition;b. National Civil Aviation Security Quality Control Programme (NCASQCP), 2016 - Revised from the 2012 edition;c. National Civil Aviation Security Training Programme (NCASTP), 2016 - Revised from 2012 edition;d. National Civil Aviation Security Certification Programme (NCASCP), 2016 - New; and e. Aviation Security Inspector Manual (ASIM), 2016; f. Advising on, and coordinating at the strategic level, security activities between ministries, departments, agencies

and other organizations that are responsible for the implementation of various aspects of the National Civil Aviation Security Programme (NCASP);

g. Recommending and reviewing the effectiveness of security measures and procedures for the implementation of NCASP; and

h. Coordinating at the strategic level AVSEC activities at a national level in order to ensure the implementation of Annex 17 Standard and Recommended Practices (SARPs); the Aviation Security Act, 2011; Aviation Security (General) Regulations, 2013 and that the NCASP is regularly adjusted to meet the needs of State policy and changes in threat.

TRAINING OF NATIONAL INSPECTORS

National Inspectors underwent regulatory and oversight training since the Aviation Security and Facilitation Oversight (ASFO) Unit was established. The training covered mandatory inspector training set in CAAB National Civil Aviation Security Training Programme.

ANNUAL QUALITY CONTROL ACTIVITIES SCHEDULE

A quality control schedule was drawn and approved in March 2016. However, much could not be done in 2015/16 since the focus was still on the development of national programmes. The schedule was carried forward into 2016/17.


…AVIATION SECURITY AND FACILITATION OVERSIGHT (ASFO)

ICAO UNIVERSAL SECURITY AUDIT PROGRAMME (USAP) CONTINUOUS MONITORING APPROCH (CMA) AUDIT

ASFO was established following the Organisation Restructuring Exercise where the new structure was taking effect from 01 April 2014 however actual implementation was 01 April 2015. As from inception date ASFO embarked on personnel training to ensure availability of qualified inspectors to discharge the unit mandate since available personnel where not initially trained. Concurrently ASFO developed National Civil Aviation Security Programmes for specifying national civil aviation security requirements that the industry and operators have to meet. Since Botswana was scheduled for USAP CMA Audit in 2016, ASFO also engaged in preparations for the Audit.

USAP CMA outcome indicate that Botswana ability to oversee implementation of national civil aviation security system is at 65.02% whilst the national average compliance with Annex 17 Standards is 69.97% which is above Regional average at (58.93%) however below Global average at (71.67%). The performance is however encouraging considering that Botswana did not have aviation security oversight until recently in 2014 when this was established.

NATIONAL CIVIL AVIATION SECURITY AND FACILITATION COMMITTEE

The National Civil Aviation Security and Facilitation Committee (NCASFC) when established under Aviation Security Act, 2011 shall be responsible for the following:

a. Advising on, and coordinating at the strategic level, security activities between ministries, departments, agencies and other organisations that are responsible for the implementation of various aspects of the National Civil Aviation Security Programme (NCASP);

b. Recommending and reviewing the effectiveness of security measures and procedures for the implementation of NCASP; and

c. Coordinating at the strategic level AVSEC activities at a national level in order to ensure the implementation of Annex 17 Standard and Recommended Practices (SARPs); the Aviation Security Act, 2011; Aviation Security (General) Regulations, 2013 and that the NCASP is regularly adjusted to meet the needs of State policy and changes in threat.

NATIONAL CIVIL AVIATION SECURITY FACILITATION COMMITTEE (NCAFC) MEETINGS

The Committee shall meet at such times and places as the Chairperson or, in the absence of the Chairperson, the Vice Chairperson may determine, but at least once in four months.

The purpose of the Committee meetings is to deliberate on its responsibilities as outlined above.The Committee met four times in the year 2015/16.


…


38 \\ // 39

AIR NAVIGATION SERVICES

Air Navigation Services is responsible for the country’s airspace or the Gaborone Flight Information Region (FIR) as it is known by the aviation community. This airspace is from ground level to infinity and it includes portions of the Namibian airspace over the Caprivi - Strip from Flight level 145 (14500 feet above mean sea level) to infinity.

Every country has its own FIR and the regions are contiguous around the globe. This enables the coordination of aircraft movement from one corner of the globe to the other.

Divisions within the Air Navigation Services are as follows:

1. AIR TRAFFIC SERVICES

For the provision of Aerodrome Control to aerodrome traffic, Approach Control for the provision of air traffic services to traffic climbing or descending into an airport and Area Control Services which provides air traffic services to the entire Botswana airspace as well as coordinating aircraft movement with neighbouring FIRs. Both Approach and Area Control are Radar based at Maun and SSKIA and procedurally based at both Kasane and Francistown.

2. AERONAUTICAL INFORMATION MANAGEMENT

For the provision and exchange of Integrated Aeronautical Information Package with other FIRs, the management of Aeronautical Information Publication as well as provision of Pilot Briefing Offices and the International NOTAM Office. These services are available at SSKIA, Maun, Kasane and Francistown.

3. SEARCH AND RESCUE

For the coordination of search and rescue operations.

4. COMMUNICATIONS, NAVIGATION AND SURVEILLANCE

For the provision of infrastructure and facilities used for the provision of Air Traffic Services. These facilities are at SSKIA, Maun, Francistown and Kasane airports as well as communication infrastructure at Shakawe, Ghanzi, Letlhakane, Mahalapye, Khutse, Jwaneng, Hukuntsi and Tsabong.

5. PROJECTS THAT WERE COMPLETED DURING THE 2015/16 FINANCIAL YEAR

Project Title Contract Date Completion Date

1.Implementation of Air Traffic Services Message Handling System (AMHS) and ICAO Flight Plan

29th August 201212th February 2016 (end of defect liability period)

2. Improvement of communication in the lower airspace 24th October 201225th January 2016 (end of defect liability period)

3.Supply and installation of ATC Radar Simulator and upgrading of Autotrac software

17th January 201321st April 2016 (end of defect liability period)


…AIR NAVIGATION SERVICES (CONTINUED)

TRAFFIC MOVEMENT FOR THE YEAR UNDER REVIEW

Total traffic movement that used the Botswana airspace was 119 842 aircraft, 55 662 being for domestic arrivals and departures, 19 466 being international arrivals and departures and 44 714 being over flights.

HIGHLIGHTS OF THE YEAR UNDER REVIEW

Air Navigation Services (ANS) was audited for the first time during the ICAO Coordinated Validation Mission that audited Botswana in 2015 following the 2013 ICVM. It is noted that ANS contributed quite positively to the total score obtained by Botswana.


…

119 84255 662 19 466 44 714

Total Traffic movement

Domestic Arrivals & Departures International Arrivals & Departures Over flights


40 \\ // 41

5OPERATIONSREVIEW


42 \\ // 43

AIR TRANSPORT

PASSENGER MOVEMENT

During the financial year 2015/16, 727 912 passengers travelled through Sir Seretse Khama International Airport (SSKIA), Maun International Airport (MIA), Kasane International Airport (KIA) and Francistown International Airport (FIA). The figure above represents a decrease of 1.7% compared to 740 733 passengers that were recorded in the previous year (2014/15). Domestic traffic made up 43% of the total, a slight decrease from the 44.4% accounted for in the previous reporting period.

International traffic recorded in the year under review was 415 624, an increase of 0.7 % year on year. SSKIA is the only airport that recorded passenger increase this year, accumulating a growth of 2.2% from the 378 752 that were registered in the year 2014/15. The increase at this airport was mainly due to scheduled movements, which was due to the introduction of Ethiopian Airlines effective from 30 June 2015, with its services between Addis Ababa and Gaborone. All the three main airports however recorded decreases this year in comparison to the last reporting period.

1.7%

0.7%

1.1%

2.2%

Decrease of PassengerMovement through Local Airports

Increase in International Traffic

Decrease in Domestic Flight Traffic

Increase in passengers at SSKIA (Sir Sereste Khama International Airport)

OPERATIONSREVIEW [CONTINUED]

…

BILATERAL AIR SERVICE AGREEMENTS

In an attempt to increase the number of foreign airlines operating into the country, the Authority accompanied the Government delegation to the ICAO Air Services Negotiations meeting held in Antalya, Turkey, in December 2015. At this meeting negotiations were held with Brazil, Luxembourg, The Nederland’s, Malaysia, India, Israel, Morocco and Ghana. These States indicated their intention to operate in Botswana and its airports, where a positive business opportunity to arise in future.

The State of Kuwait and South Arabia indicated their desire to sign a Bilateral Air Service Agreements with Botswana, which was a development from the signing of the Memorandum of Understanding (MoU) in 2013. CAAB recommended to the Government to fully liberalise the airspace to facilitate an increase in the number of foreign operators to use its national airports infrastructure.

CORPORATE PLANNING AND STRATEGY

The environment in which organisations, including the aviation industry in Botswana, operates is constantly changing with the influence of various factors. Since the turn of the millennium, the general business environment has become more volatile, unpredictable and very competitive. These factors guided the development of the CAAB strategy for the five year period commencing on 1 April 2015 and to end on 31 March 2020. The strategic plan seeks to transform the CAAB into an effective and sustainable aviation regulator as well as service provider so as to cope with the increasingly competitive environment.

The CAAB 2015 - 2020 strategy also calls for the establishment of the corporate strategy office whose role is to plan, lead and manage the development and implementation of the Authority-wide strategy. The office is also responsible for the Authority’s Enterprise Risk Management (ERM) which includes program development, and providing both oversight and direction for management of risks across the Authority.

The Corporate Planning office was established on 1st February 2016 with two officers. Since the inception of the Strategy Office there have been several achievements; CAAB has been able to ensure that the strategy translates into the corporate strategy map and the corporate scorecard; alignment of CAAB by cascading the scorecard across the organisation so as to integrate strategic priorities and ensure synergies as well as manage strategic initiatives.

In implementing the CAAB 2015 - 2020 strategy, there were some achievements made in the processes as well as challenges which called for a relook at priorities. The Strategy Office facilitated the CAAB to embark on the review of the CAAB 2015 - 2020 Strategic Plan during the last quarter of the 2016/17 financial year. The purpose was to reprioritise and refocus the organisation for maximum implementation and achievement of the intended results. The review included carrying out a current situational analysis as well as stakeholder engagement to ascertain CAAB commitment to bettering the aviation industry in Botswana. The review was successfully carried out and execution of the revised CAAB 2015 - 2020 Strategic Plan began on 1st April 2017.

The 2015 - 2020 strategy also called for the implementation of the Enterprise Risk Management, the aim being for CAAB to build a risk conscious culture as well as managing both strategic and operational risks across the organisation. The process involved the sensitisation of the organisation on Enterprise Risk Management, which entailed training of executive management, middle management and heads of units. A total of one hundred and fifteen (115) employees were trained across CAAB, including Head office and the six airports. In recognising that Corporate Risk Management is an integral part of an effective internal control system, CAAB realised the need to have a policy that expresses the risk appetite and tolerance of the Authority. The policy is CAAB’s commitment to the risk management as an integral part of the organisation’s operations, focusing on strategies to minimise risks to CAAB mission and objectives. The policy sets out the philosophy of risk management within CAAB that outlines broadly how the risk management process shall be adhered to within the Authority. The CAAB Enterprise Risk Management Policy was adopted by the Executive Management Team and approved by the CAAB Board and implementation started thereafter.

OPERATIONSREVIEW …


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AIRPORT UPGRADE AND MAINTENANCE

CAAB has a mandate to ensure that all airports and airfields in the country are in a good and usable condition at all times. As such, the Authority continuously carries out maintenance works and upgrades of existing airports and airfields. During the period under review, CAAB carried out a number of maintenance services and development in all our major airports and airfields.

SIR SERETSE KHAMA INTERNATIONAL AIRPORT (SSKIA)

Upgrading of the Sir Seretse Khama International Airport Terminal Building was completed in August 2015; and was officially opened on 16th October 2015 by the President of the Republic of Botswana, Lieutenant General Doctor Seretse Khama Ian Khama. Currently, the project is under a defects liability period where the contractor may be called in to resolve any minor issues with the infrastructure. The defects liability period is expected to end in August 2016.

The airport is now able to handle up to 950 passengers at peak hour in the terminal building, as would be standard capacity for a Boieng 747 aircraft. The runway has a new length of 4 000 metres, and a width of 60 metres. The airport has a full parallel taxiway and link taxiways, as well as Airfield Ground Lighting System for night flights. A further improvement includes an Instrument Landing System and automated weather observation system.

The SSKIA Land Use Master Plan was approved by the Gaborone City Council Planning Board in June 2015. CAAB is currently working on the Terms of Reference for the engagement of a Transaction Advisor to assist with the funding models for the development of the basic infrastructure. The intention of the SSKIA Land Use Master Plan is to contribute positively to the growth of Gaborone and Botswana by offering all the services that an airport city has for the convenience of the passengers.

KASANE INTERNATIONAL AIRPORT (KIA)

The project for the refurbishment of the Terminal and Associated buildings (Air Traffic Control Tower, Technical Block, Fire Station and Police Station) commenced on 2 November 2014 and is expected to be completed in October 2016 at a contract Sum of BWP280.8 million. The improvements are expected to enhance operations as well as improve conditions for all stakeholders of the airport in Kasane.

The Passenger Terminal Building for Kasane International Airport is designed to cater for a peak hour passenger rate of 230 people departing and arriving. The peak hour passenger rate is similar the number of people on a 150-seater aircraft equivalent to a Boeing 737 or Airbus A319. This passenger volume is at an IATA (International Air Transport Association) Level of Service C with the peak expected to be reached in 2030. The Level of Service thus ensures that that passengers are processed within acceptable international times and that the terminal building is not congested. The Passenger Terminal Building is able to handle 387 000 passengers annually.

The KIA runway shall be extended from 2 000 to 3 000 metres, as well as widened from 30 to 45 metres. There will be a provision of airfield ground lighting system to facilitate night operations and the provision of an automated weather observation system. All I.C.T. special systems have been commissioned and tested to satisfactory level and now await operation of the terminal building. These include structured cabling; Flight Information Display Systems (FIDS); CATV; Master clock; telephones and Environmental Monitoring System (EMS).

MAUN INTERNATIONAL AIRPORT (MIA)

The Maun Tower has been complemented with installation of telephone and network infrastructure, while the airport has also been connected to Fibre network which links it to other CAAB stations faster and at lower cost compared to a leased line connection.

Air Traffic Control Tower and Technical Block construction works were awarded to Colic Construction and Development Company (Pty) Ltd for BWP85.68 million. Construction works are scheduled for completion in May 2016.

The new Maun Terminal Building is still in the planning stage and will be expected to be ready for implementation in the next reporting period. The requirements for the eventual development are to be communicated to the relevant stakeholders through an open tender process.


…SELIBE PHIKWE AIRPORT

The Rehabilitation Project which was wholly funded by the Selebi Phikwe Economic Development Unit (SPEDU) at a cost of BWP14, 836, 119.00; and was implemented in joint venture with the Unit. It was completed in September 2015, and is in the defect liability phase. The rehabilitation project is key to one of the strategic areas of development in support of economic diversification and promotion of key economic opportunities in Botswana.

STRATEGIC AIRFIELDS ACQUISITIONS

CAAB has acquired new strategic airfields around the country at Boatlaname, Sekoma, Werda, Salajwe, Rakops, Qangwa and Panda. These airfields are of strategic importance and can serve the purposes of emergency rescue, tourism or mineral exploration.

STRATEGIC AIRFIELDS MAINTENANCE

Completed maintenance works include dry-grading works of Kanye and Goodhope, fog spraying and marking of Kang Airfield and major maintenance works of runway resurfacing at Gumare and Shakawe airfields.

Gumare, Shakawe, Mamuno and Gweta airfields were originally scheduled for runway resurfacing works in 2015. The tender for this project was advertised. However, the received bids came in higher than what was budgeted for, leading to a cancellation of the tender due to budgetary constraints. CAAB then resorted to prioritising major maintenance based on the capacity performance of each airfields. Shakawe and Gumare airfields were then accorded priority to receive major maintenance and resurfacing.

INFORMATION TECHNOLOGY

Information Communication Technology is the backbone of CAAB operations in terms of network infrastructure, application systems and various technology oriented services. Through improved technology, CAAB’s service to its stakeholders is enhanced for instance, CAAB administrates passenger processing systems in all national airports. This service provides passengers in all national airports an easier and faster user experience.

The key highlight in this reporting period includes the commissioning of the CAAB Virtual Private Network (VPN) fibre link to Maun and Kasane. The fibre link is complete and operational including at KIA where the fibre link has been installed and awaits commissioning of the new Kasane terminal building.

CAAB has improved its Server Infrastructure and distribution of computers hardware in terms of laptops, printers and computers to various stations. This has resulted in improvement of user effectiveness in their daily job performance. CAAB staff have full access to email, internet services and other systems relevant to delivering on our mandate.


…


46 \\ // 47

CORPORATE SOCIAL RESPOSIBILITY

VILLAGE DEVELOPMENT COMMITTEE (VDC) HOUSE AT SENONNORI WARD IN MAUN, NGAMILAND

During the period under review, as part of its Corporate Social Responsibility Programme, the Authority renovated a Village Development Committee (VDC) house at Senonnori Ward in Maun, Ngamiland. The original house was built during 1996 as a labour intensive project under the Contagious Bovine Pluearenium Programme (CBPP) following the 1996 outbreak of the cattle lung disease which erupted in 1995. During that time, all cattle in Ngamiland were killed in an effort to eradicate the disease.

Other than the procurement of material and payment of the contractor at a tune of over BWP 44, 249. 00 for material and Labour, CAAB offered the services of the Maun airport based engineers for project supervision. The refurbished house is to be leased out for the purposes of generating income for the community.

MATSIENG TRUST

CAAB has been a proactive supporter of the safety and growth of aviation for leisure or sport in Botswana. The Authority safeguards proceedings and enforces international best practice at all aviation related events in the country. Consequently, CAAB has been able to assist in contributing positively to the Matsieng Trust through sponsorship of the Wesbank Botswana International Airshow. CAAB supported the Airshow by part sponsoring the cost of some permits for pilots flying in for the Air Show. The reduced cost burden helps keep the event attractive and more accessible, thereby leading to increased audiences and higher donations to Matsieng Trust and the charities it supports.

CAAB further appreciates that support for these events contributes positively to Botswana’s tourism industry by keeping the Country on the international calendar for leisure aviation events.

PHASE II - ORGANISATIONAL STRUCTURAL REVIEW

CAAB embarked on restructuring process in the year 2014/15. The exercise resulted in a new organisational structure whose objective was to facilitate the achievement of the CAAB mandate.


…

The new structure which was implemented with effect from April 2015 had some positives such as:

a. Strengthening the oversight function of the organisation by introducing two new Divisions into CAAB. These were the Aviation Security & Facilitation Oversight and the Aviation Safety Standards Oversight divisions; and

b. Introduction of new functions at the airports such as customer services and airport safety offices and a Strategy Office at the CAAB head office.

However, following implementation of the structure, there were some identifiable gaps that required immediate attention. These gaps were mainly around the Jobs analysis and Job evaluation which are critical towards determining CAAB competitiveness to the market, the eventual aim being to positioning CAAB as the employer of choice in aviation. It was for this reason that the Authority is currently undergoing the Phase II - Organisational restructuring. In addition, the exercise includes staffing analysis to determine the adequacy of staffing in terms of numbers and skills mix in view of the need to meet the country’s aviation safety and security obligations in line with the International Civil Aviation Organisation Standards and Recommended Practices.

LABOUR RELATIONS

The Authority embarked on a salary negotiation process with the Botswana Public Employees Union (BOPEU) for the first time since signing a Collective Labour Agreement on 1st September 2014. Following the success of the negotiation process, the Authority and the Union agreed to revised employees’ salaries by 13% with effect from 1st April 2015. This was the first salary increase which was experienced by the Authority since 2011.

TRAINING AND DEVELOPMENT

Following the ICAO Coordinated Validation Mission (ICVM) of December 2015, some operational training requirements were identified. As a remedial measure to address these challenges, a Training Plan for 2015/16 was developed.

The Training and Development Plan aimed at capacity building including, among others, regional and international benchmarking trips, attendance of ICAO and International Air Transport Association (IATA) accredited external and local training courses.

The Authority expended BWP7, 605,000.00 towards Training and Development requirements on CAAB’s seven hundred and sixty two (762) staff members.

COMPLIANCE

During the year under review, Internal Audit Division provided consultancy and advisory services to CAAB and participated in other committees on a short-term or long-term basis.

Through its assurance reviews and consultancy services, Internal Audit noted issues of non-compliance with internal controls and regulations and delays or non-implementation of Internal Audit recommendations.

However, through continued engagement with Management through the Chief Executive Officer’s office, audit follow ups noted some improvements.

The Internal Audit Annual Plan was negatively affected by both staff and financial resources constraint resulting with a 75% achievement of the plan. There is hope to improve on this performance as there are deliberate intentions by Management and the Board to adequately resource the Division to be effective.


…


48 \\ // 49

6CORPORATEGOVERNANCE


50 \\ // 51

ORGANISATIONAL INFORMATION

Name Civil Aviation Authority of Botswana

Legal Form Body Corporate

Shareholder Government of Botswana

Mandate Promote the safe, regular, secure and efficient use and development of civil aviation in Botswana.

Responsibility

Regulation of air transport, provision of air navigation services, management of airports and advising the Government of the Republic of Botswana on all aspects of civil aviation.

Place of Domicile Gaborone, Botswana

Board Members

Anthony G. ReesMotebele Rashimi SentleLt General Tebogo HC Masire (Rtd)Geoffrey Puseletso Moshabesha

Chairperson of the Board Mark John Sampson

Chief Executive Officer Geoffrey Puseletso Moshabesha

Secretary to the Board David Fani

Board Appointments during the Review PeriodThembinkosi JohnsonAsad Petkar

Board Resignations/Retirements during the Review Period


Registered Office

Plot 61920Letsema Office ParkFairgroundsGaborone, Botswana

Postal AddressP.O. Box 250Gaborone, Botswana

BankersStanbic Bank Botswana LimitedBarclays Bank of Botswana LimitedBancABC Botswana Limited

Auditors Auditor General of Botswana

CORPORATE GOVERNANCE

…


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CORPORATE GOVERNANCE STATEMENT

The Civil Aviation Authority of Botswana (CAAB) subscribes to the principles of good corporate governance. CAAB strives to make good corporate governance part of the daily operations of the organisation through adherence to national and international principles, practices, standards and norms that promote, among others, fairness, accountability and transparency.

In order to demonstrate CAAB’s commitment to good corporate governance, the Board has put in place a Charter which sets out the duties and responsibilities of the Board and those of the Management. The Charter seeks to enhance delivery on the CAAB mandate within a corporate governance framework which provides a clear, consistent and transparent set of principles by which the Board and Management agree to be bound in the discharge of their duties.

BOARD OF DIRECTORS AND COMPOSITION

BOARD

The Board is the governing body of the Authority. In terms of Section 15 of the Civil Aviation Act, 2011, the Board shall consist of a Chairperson and not less than four (4) nor more than eight (8) members (including the Chief Executive Officer). The appointing authority for members of the Board is the Minister of Transport and Communications.

During the period under review, the following served on the BoardMark John Sampson - ChairpersonAnthony Glyndwr Rees - MemberLt. General Tebogo Masire (Rtd) - MemberMotebele Rashimi Sentle - MemberOnalenna Sechele - MemberAsad Petkar - MemberThembinkosi Johnson - MemberGeoffrey Puseletso Moshabesha - Ex officio Member & Chief Executive Officer

The operations of the Board are governed by the Board Charter which prescribes minimum standards designed to promote high standards of corporate governance.

BOARD COMMITTEES

Board Finance and Audit CommitteeMotebele Rashimi Sentle - Member/Acting Chairperson Geoffrey Puseletso Moshabesha - Member

Board Human Capital and Administration CommitteeMotebele Rashimi Sentle - ChairpersonGeoffrey Puseletso Moshabesha - Member

Board Tender CommitteeLt. General Tebogo Masire (Rtd) - ChairpersonAnthony Glyndwr Rees - MemberGeoffrey Puseletso Moshabesha - Member

Board Technical Services/Customer Service CommitteeAnthony Glyndwr Rees - ChairpersonLt. General Tebogo Masire (Rtd) - MemberGeoffrey Puseletso Moshabesha - Member

BOARD MEMBERS’ REMUNERATION

Board members are remunerated for attendance of meetings in accordance with the schedule of fees as advised by the Government of Botswana from time to time. During the period under review, the members’ fees were paid at the following rates:Chairperson - BWP735.00Member - BWP588.00

BOARD MEETINGS

The Civil Aviation Act, 2011 requires the Board to meet at least once every three months. Dates for ordinary meetings of the Board are set at the beginning of the financial year. Special meetings are held as and when dictated by the business or other requirements of the Authority. During the period under review, a total of four (4) Board meetings were held. The table below shows the attendance of Board meetings and meetings of Board Committees by respective members:

Members Board Finance and Audit Committee

Human Capital and Admin.committee

Tender Committee

Technical Services Committee

Mark John Sampson 4/4 - - - 1/2

Anthony Glyndwr Rees 4/4 - - 2/2 2/2

Lt. General Tebogo Masire (Rtd) 4/4 - - 2/2 2/2

Motebele Rashimi Sentle 3/4 1/1 - - -

Geoffrey Puseletso Moshabesha 4/4 1/1 - 2/2 2/2

DISCLOSURE OF INTEREST

At every meeting of the Board or Committee of the Board, each member is required, in compliance with Section 23 of the Civil Aviation Act, 2011, to disclose any direct or indirect interest in a private capacity that he/she might have on any of the matters which are the subject of discussion at such meeting. Besides being asked by the Chairperson to state if they have any interest, members are required to each fill a Declaration of Interest Form indicating whether they have any such interest.

CORPORATE SECRETARY

The Corporate Secretary is responsible for the provision of Board administrative and legal advisory services as well as corporate governance advice to the Board and Management. The Secretary is the custodian of the legal transactions of the Authority.

CORPORATE GOVERNANCE [CONTINUED]

…

CORPORATE GOVERNANCE [CONTINUED]

…


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CIVIL AVIATION AUTHORITY OF BOTSWANAFINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2016

CONTENTS58 GENERAL INFORMATION

59 STATEMENT OF RESPONSIBILITY BY THE BOARD OF DIRECTORS

60 REPORT OF THE INDEPENDENT AUDITOR

62 STATEMENT OF COMPREHENSIVE INCOME

63 STATEMENT OF FINANCIAL POSITION

64 STATEMENT OF CASHFLOWS

65 STATEMENT OF CHANGES IN EQUITY

66 ACCOUNTING POLICIES

75 NOTICE TO THE FINANCIAL STATEMENTS


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FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2016


GENERAL INFORMATION

PRINCIPAL ACTIVITIES To promote the safe, regular, secure and efficient use and development of civil aviation in Botswana.

FOR THE YEAR ENDED 31 MARCH 2016

NON EXECUTIVE DIRECTORS Mr. Mark Sampson (Chairperson)

Mr. Anthony Glyndwr Rees


Mr. Motebele Sentle

Ms. Onalenna Sechele

Mr. Asad Petkar

Mr. Thembinkosi Johnson

RETIRED DURING THE YEAR

EXECUTIVE MANAGEMENT

Mr. Geoffrey Puseletso Moshabesha Ex officio Member & Chief Executive Officer

Mr. David Fani Corporate Secretary

Mr. Silas Silas Director, Air Navigation Services

Mr. Justice Masole Director, Airports

Mr. Kabo Phutietsile Director, Airports Engineering & Maintenance

Mrs. Boitumelo Wadikonyana Head, Human Capital and Administration

Mrs. Mpho Mphafe-Fish Director, Finance

REGISTERED OFFICE Plot 61920, Fairgrounds Office Park Gaborone, Botswana

INDEPENDENT AUDITORS Auditor General - Botswana Government

BANKERS Stanbic Bank Barclays Bank of Botswana Limited Banc ABC

COUNTRY OF INCORPORATION AND DOMICILE Botswana

CURRENCY Botswana Pula

STATEMENT OF RESPONSIBILITY BY THE BOARD OF DIRECTORS

The Board of the Civil Aviation Authority of Botswana is responsible for the maintenance of adequate accounting records and the preparation, integrity and fair presentation of the financial statements. The financial statements presented on pages 62 to 89 have been prepared in accordance with International Financial Reporting Standards and the manner required by the Civil Aviation Act of 2011.

In preparing these Financial Statements, the Board believes that they have used the most appropriate accounting policies which are applied consistently and supported by reasonable judgments and estimates. The Board of Directors believes the Financial Statements as presented reflect a true and fair view of the operations of the Authority.

In addition, these Financial Statements have been prepared on a going concern basis. Based on the Authority’s strategic plans and forecasts of cash resources, the Board of Directors has no reason to believe that the going concern will cease in the foreseeable future.

Accordingly, the Annual Financial Statements for the Authority for the year ended 31 March 2016 were authorised for issue by resolution of the Board on the 17 October 2017 and are duly signed on its behalf by:

Chairperson of the Board Chief Executive Officer


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REPORT OF THE INDEPENDENT AUDITOR REPORT OF THE INDEPENDENT AUDITOR


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STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2016

Notes 2016 2015

Pula Pula

Income

Botswana Government grants 1 159 486 530 143 432 140

Revenue generated 20 120 870 137 111 075 507

Amortisation of capital grant 8 116 282 557 108 143 822

Gross operating income 396 639 224 362 651 469

Staff costs 21 (197 268 332) (158 793 826)

Other operating costs 22 (193 401 850) (177 125 843)

(390 670 182) (335 919 669)

Surplus/(Deficit) for the year before interest 5 969 042 26 731 800

Finance income 2 2 173 617 3 001 755

Finance cost 2 - -

Surplus/(Deficit) for the year 8 142 659 29 733 556

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2016

Notes 2016 2015

Pula Pula

ASSETS

Non-Current Assets

Property, plant and equipment 5 4 711 787 647 3 516 216 406

Intangible assets 6 57 171 272 42 121 634

Capital work in progress 7 203 815 152 28 124 908

4 972 774 071 3 586 462 948

Current assets

Trade and other receivables 10 42 360 526 27 607 264

Cash and short-term deposits 9 160 168 736 93 810 201

202 529 262 121 417 465

TOTAL ASSETS 5 175 303 333 3 707 880 413

EQUITY AND LIABILITIES

Equity

Capital funds 3 622 234 632 3 583 510 814

Revaluation surplus 1 359 471 835 12 957 023

Accumulated surplus 40 686 624 32 543 957

5 022 393 091 3 629 011 794

Liabilities

Current Liabilities

Trade and other payables 11 54 928 079 58 070 998

Deferred Income - Government Contributions 12 97 982 165 20 797 607

152 910 244 78 868 605

TOTAL EQUITY AND LIABILITIES 5 175 303 334 3 707 880 413


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STATEMENT OF CASHFLOWS AS AT 31 MARCH 2016

Notes 2016 2015

Pula Pula

Operating activities

Surplus/(Deficit) for the year 4 5 969 042 26 731 800

Non-cash items adjustments:

Depreciation and armotisation of intangible assets 5 120 206 399 110 963 394

Revaluation loss 2 137 376 -

Profit/Loss on disposal of property, plant and equipment (53 637) (52 708)

Unrealised gain/Loss - (755 445)

Amortization of capital fund 8 (116 282 557) (108 143 822)

Working capital adjustments:

(Increase)/decrease in trade & other receivables (14 753 262) 9 326 244

Increase/(decrease) in trade & other payables 74 041 639 17 140 363

Net cash flows from operating activities 71 265 000 55 209 826

Interest paid 2 - -

71 265 000 55 209 826

Investing activities

Proceeds from sale of property, plant and equipment 104 137 816 226

Interest received 2 2 173 617 3 001 755

Purchase of property, plant and equipment (7 184 219) (2 108 315)

Net cash flows from investing activities (4 906 465) 1 709 666

Net increase in cash and cash equivalents 66 358 535 56 919 491

Cash & cash equivalents at 1 April 2015 93 810 201 36 890 702

Cash & cash equivalents at 31 March 2016 9 160 168 736 93 810 201

STATEMENT OF CHANGES IN EQUITY AS AT 31 MARCH 2016

Capital Grant

Revaluation Reserve

Accumulated Profit /(Loss)

Total

Pula Pula Pula Pula

Balance at 1 April 2014 3 545 506 239 3 838 023 2 810 402 3 552 154 664

Additions to Capital Grant 146 903 843 146 903 843

Armotisation of Property, plant and equipment provided by the Government

(108 143 822) (108 143 822)

Realisation of reserves on disposal of assets (755 445) (755 445)

Additions to Revaluation Reserves 9 119 000 9 119 000

-

Surplus for the year 29 733 555 29 733 555

-

Balance at 31 March 2015 3 583 510 814 12 957 023 32 543 957 3 629 011 794

Balance at 1 April 2015 3 583 510 814 12 957 023 32 543 957 3 629 011 793

Additions to Capital Grant 221 011 396 221 011 396

Armotisation of Property, plant and equipment provided by the Government

(116 282 557) (116 282 557)

Revaluation Loss for grant assets (65 789 021)

Realisation of reserves on disposal of assets (216 000) (216 000)

Additions to Revaluation Reserves 1 346 514 812 1 346 514 812

Surplus for the year 8 142 659 8 142 659

Balance at 31 March 2016 3 622 234 632 1 359 471 835 40 686 616 5 088 182 104


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ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2016

A. PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years unless otherwise stated.

BASIS OF PREPARATION

The annual financial statements have been prepared in accordance with the Civil Aviation Act, 2011 and the International Financial Reporting Standards (IFRS), International Financial Reporting Standards Committee (“IFRIC”) issued and effective at the date of preparing these financial statements. The financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and financial liabilities at fair value through profit or loss.

SIGNIFICANT ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of financial statements and the reported revenues and expenses. Although the estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates.

B. NEW STANDARDS AND INTERPRETATIONS

STANDARDS AND INTERPRETATIONS EFFECTIVE AND ADOPTED IN THE CURRENT YEAR

In the current period the Authority has adopted the following new and revised Standards and interpretations of the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to its operations and effective for annual reporting periods beginning 1 January 2015.

AMENDMENTS TO IAS 19 DEFINED BENEFIT PLANS: EMPLOYEE CONTRIBUTIONS IAS 19 requires an entity to consider contributions from employees or third parties when accounting for defined

benefit plans. Where the contributions are linked to service, they should be attributed to periods of service as a negative benefit. These amendments clarify that, if the amount of the contributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service. This amendment is effective for annual periods beginning on or after 1 July 2014. This amendment is not relevant to the Authority since the Authority has no defined benefit plans.

ANNUAL IMPROVEMENTS 2010 - 2012 CYCLE

With the exception of the improvement relating to IFRS 2 Share-based Payment applied to share-based payment transactions with a grant date on or after 1 July 2014, all other improvements are effective for accounting periods beginning on or after 1 July 2014. The Authority has applied these improvements for the first time in these financial statements. They include:

IFRS 2 SHARE-BASED PAYMENT

This improvement is applied prospectively and clarifies various issues relating to the definitions of performance and service conditions which are vesting conditions. The clarifications are consistent with how the Authority has identified any performance and service conditions which are vesting conditions in previous periods. These amendments did not impact the Authority’s financial statements or accounting policies, as the Authority does not carry out share-based payment transactions.


B. NEW STANDARDS AND INTERPRETATIONS (CONTINUED)

IFRS 3 BUSINESS COMBINATIONS

The amendment is applied prospectively and clarifies that all contingent consideration arrangements classified as liabilities (or assets) arising from a business combination should be subsequently measured at fair value through profit or loss whether or not they fall within the scope of IAS 39.

This is not applicable to the Authority.

IFRS 8 - OPERATING SEGMENTS

The amendments are applied retrospectively and clarify that:

An entity must disclose the judgements made by management in applying the aggregation criteria in paragraph 12 of IFRS 8, including a brief description of operating segments that have been aggregated and the economic characteristics (e.g., sales and gross margins) used to assess whether the segments are ‘similar’.

The reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is reported to the chief operating decision maker, similar to the required disclosure for segment liabilities. This is not applicable to the Authority.

IAS 16 - PROPERTY, PLANT AND EQUIPMENT AND IAS 38 INTANGIBLE ASSETS

The amendment is applied retrospectively and clarifies in IAS 16 and IAS 38 that the asset may be revalued by reference to observable data by either adjusting the gross carrying amount of the asset to market value or by determining the market value of the carrying value and adjusting the gross carrying amount proportionately so that the resulting carrying amount equals the market value. In addition, the accumulated depreciation or amortisation is the difference between the gross and carrying amounts of the asset. The Authority’s assets were revalued in compliance to applicable standards.

IAS 24 - RELATED PARTY DISCLOSURES

The amendment is applied retrospectively and clarifies that a management entity (an entity that provides key management personnel services) is a related party subject to the related party disclosures. In addition, an entity that uses a management entity is required to disclose the expenses incurred for management services. This amendment is not relevant for the Authority as it does not receive any management services from other entities.

STANDARDS AND INTERPRETATIONS IN ISSUE BUT NOT YET EFFECTIVE OR RELEVANT

Standards and interpretations in issue but not yet effective or relevant at the date of issuance of the Authority’s financial statements are listed below. This listing is of standards and interpretations issued, which the Authority reasonably expects to be applicable at a future date. The Authority intends to adopt these standards when they become effective.


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ANNUAL IMPROVEMENTS 2011 - 2013 CYCLE

IFRS 3 BUSINESS COMBINATIONS

- The amendment is applied prospectively and clarifies for the scope exceptions within IFRS 3 that:- Joint arrangements, not just joint ventures, are outside the scope of IFRS 3;

This scope exception applies only to the accounting in the financial statements of the joint arrangement itself. The Authority is not a joint arrangement, and thus this amendment is not relevant.

IFRS 13 FAIR VALUE MEASUREMENT

The amendment is applied prospectively and clarifies that the portfolio exception in IFRS 13 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of IAS 39. The Authority does not apply the portfolio exception in IFRS 13.

IAS 40 INVESTMENT PROPERTY

The description of ancillary services in IAS 40 differentiates between investment property and owner-occupied property (i.e., property, plant and equipment). The amendment is applied prospectively and clarifies that IFRS 3, and not the description of ancillary services in IAS 40, is used to determine if the transaction is the purchase of an asset or a business combination. In previous periods, the Authority has relied on IFRS 3, not IAS 40, in determining whether an acquisition is of an asset or is a business acquisition. Thus, this amendment did not impact the accounting policy of the Authority.

IFRS 14 REGULATORY DEFERRAL ACCOUNTS

IFRS 14 is an optional standard that allows an entity, whose activities are subject to rate-regulation, to continue applying most of its existing accounting policies for regulatory deferral account balances upon its first-time adoption of IFRS. Entities that adopt IFRS 14 must present the regulatory deferral accounts as separate line items on the statement of financial position and present movements in these account balances as separate line items in the statement of profit or loss and OCI. The standard requires disclosure of the nature of, and risks associated with, the entity’s rate-regulation and the effects of that rate-regulation on its financial statements. IFRS 14 is effective for annual periods beginning on or after 1 January 2016. Since the Authority is an existing IFRS preparer and is not involved in any rate-regulated activities, this standard does not apply.

AMENDMENTS TO IAS 16 AND IAS 38

CLARIFICATION OF ACCEPTABLE METHODS OF DEPRECIATION AND AMORTISATION

The amendments clarify the principle in IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets that revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset is a part) rather than the economic benefits that are consumed through use of the asset. As a result, a revenue based method cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets. The amendments are effective prospectively for annual periods beginning on or after 1 January 2016, with early adoption permitted. These amendments do not have any impact to the Authority given that the Authority has not used a revenue-based method to depreciate its noncurrent assets.


AMENDMENTS TO IAS 16 AND IAS 41 AGRICULTURE: BEARER PLANTS

The amendments change the accounting requirements for biological assets that meet the definition of bearer plants. Under the amendments, biological assets that meet the definition of bearer plants will no longer be within the scope of IAS 41 Agriculture. Instead, IAS 16 will apply. After initial recognition, bearer plants will be measured under IAS 16 at accumulated cost (before maturity)and using either the cost model or evaluation model (after maturity). The amendments also require that produce that grows on bearer plants will remain in the scope of IAS 41 measured at fair value less costs to sell. For government grants related to bearer plants, IAS 20 Accounting for Government Grants and Disclosure of Government Assistance will apply. The amendments are retrospectively effective for annual periods beginning on or after 1 January 2016, with early adoption permitted. These amendments do not have any impact to the Authority as the Authority does not have any bearer plants.

IFRS 9 FINANCIAL INSTRUMENTS

In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.

C. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is subsequently carried at revalued amounts less accumulated depreciation and any impairment losses, being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair value at the reporting date. Initial recognition of property, plant and equipment is shown at cost or fair value which ever is the greater. Subsequent costs are included in the asset’s carrying amount, only when it is probable that future economic benefits associated with the item will flow to the Authority. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial year in which they were incurred.

Any surplus arising on revaluation is credited to the revaluation surplus except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in that case the increase is credited to the statement of comprehensive income. Upon disposal any revaluation reserve relating to the particular asset being sold is transferred to retained earnings.

DEPRECIATION

Depreciation is not provided on freehold land and property plant and equipment in the course of construction as they are not yet available for use. Depreciation is provided on property plant and equipment on a straight line basis taking into account any residual value. The estimated useful lives assigned to groups of property plant and equipment are:

Buildings 30 to 50 years Furniture and fittings up to 10 years Plant and equipment 5 to 25 years Vehicles 6 to 10 years


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C. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

The residual value, useful life of each asset and, depreciation methods are reviewed at each financial period-end, and adjusted prospectively if appropriate. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising from de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the year the asset is derecognised. Consumables and loose tools are written off in the year of purchase.

D. FOREIGN CURRENCY TRANSLATION FUNCTIONAL CURRENCY

Items included in the financial statements of the Authority are measured using the currency of the primary economic environment in which the Authority operates (functional currency). The financial statements are presented in Botswana Pula which is the Authority’s functional currency.

FOREIGN CURRENCY TRANSACTIONS AND BALANCES

Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of the transaction. Customers are billed at a monthly average exchange rate. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation of the year end balances of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

E. IMPAIRMENT OF NON FINANCIAL ASSETS

The Authority assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Authority makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s fair value less cost to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the assets. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by available fair value indicators.

F. TRADE RECEIVABLES

Trade receivables are recognised initially at fair value and subsequently measured at fair value less provision for impairment. The amount of the provision is the difference between the carrying amount and the present value of the estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowable account, and the amount of the loss is recognised in the income statement within ‘general and administration expenses’. When a trade receivable is uncollectible, it is written off against the provision for bad debts. Subsequent recoveries of the amounts previously written off are credited against ‘other income’ in the income statement.


G. CASH AND CASH EQUIVALENTS

Cash, short and medium term deposits in the balance sheet comprise of cash at banks and on hand and short term deposits with an original maturity of three months or less. For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, including the balances of outstanding bank overdrafts.

H. PROVISIONS AND CONTINGENCIES

Provisions are recognised when the Authority has a present obligation (legal or constructive) as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Contingent assets and contingent liabilities are not recognised, but are disclosed in the notes to the financial statements.

I. EMPLOYEE BENEFITS

SHORT-TERM EMPLOYEE BENEFITS

The cost of short-term employee benefits, those payable within 12 months after the service is rendered, such as annual leave are recognised in the period in which the service is rendered and are not discounted. The short -term employee benefits of the Company include the following: salaries, paid annual leave and paid sick leave, bonuses and non-monetary benefits (car, housing medical aid and subsidised goods and services). The cost of termination benefits is recognised only if the company is demonstrably committed without any realistic possibility of withdrawing the commitment, by a formal plan to prematurely terminate an employee’s employment.

DEFINED CONTRIBUTION PLAN

The Pension Fund was established with effect from 1 March 2011 and was registered as a defined contribution scheme pension fund, in terms of the Pension and Provident Funds Act (Chapter 27:03). All permanent employees of Civil Aviation Authority of Botswana are members of the Pension Fund. Employees contribute 5% of their basic salaries towards the Fund and the employer contributes 15% of the members pensionable earnings towards the Fund to finance retirement benefits, death benefits and Fund expenses. The Authority does not have any legal or constructive obligation to pay further contributions if the fund fails to meet employee benefits at the end of service. For those employees who do not participate in the Pension Fund, provision is made for severance benefits in terms of the Employment Act (Cap 47.01).

J. LEASES

Leases in which a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.


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K. REVENUE RECOGNITION

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Authority and the revenue can be reliably measured. Revenue is measured at fair value of the consideration receivable, excluding discounts, rebates and other value added taxes and duty.

L. BORROWING COSTS

Borrowing Costs are recognised initially at proceeds received and subsequently stated at amortised cost. There were no borrowing costs during the period under review.

M. GOVERNMENT GRANTS/DEFERRED

Government grants are recognised when there is reasonable assurance that the Authority will comply with the conditions attached to them and the grants will be received.

GOVERNMENT GRANTS RELATED TO ASSETS

These are grants whose primary condition is that for the Authority to qualify for them the Authority should purchase, construct or otherwise acquire long-term assets. Subsidiary conditions may also be attached restricting the type or location of the assets or the periods during which they are to be acquired or held.

The Authority presents the grant in the statement of financial position by setting up the grant as deferred income. When the grant relates to an expense item, it is recognised on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relate to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

GOVERNMENT GRANTS RELATED TO INCOME

These are government grants other than those related to assets. These are recognised as income over the periods necessary to match them with the related costs that they are intended to compensate.

A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Authority with no future related costs is recognised as income of the period in which it becomes receivable. Government grants related to income are presented as income in the statement of comprehensive income (separately).

The utilisation of a grant related to income is applied first against any un-armotised deferred credit set up in respect of the grant. To the extent that the repayment exceeds any such deferred credit, or where no deferred credit exists, the repayment is recognised immediately as an expense.

Utilisation of a grant related to an asset is recorded by increasing the carrying amount of the asset or reducing the deferred income balance by the amount repayable. The cumulative additional depreciation that would have been recognised to date as an expense in the absence of the grant is recognised immediately as an expense.


N. FINANCIAL RISK MANAGEMENT

FOREIGN EXCHANGE RISK

In the normal course of business, the Authority enters into some transactions denominated in foreign currencies. In addition, the Authority has receivables and liabilities in foreign currencies mainly in the United States Dollars (USD). As a result, the Authority is exposed to fluctuations in foreign currency exchange rates. To manage the foreign exchange risk arising from these transactions the Authority keeps the revenue received in USD in a USD bank account from which all USD denominated goods and services are paid. The amount of revenue that the Authority receives in USD monthly far exceeds the obligations payable in USD. Furthermore the USD has appreciated against the pula during the financial year under consideration. As a result it was not economical to hedge for the USD currency fluctuations.

INTEREST RATE

Fluctuation in interest rates impact on the value of short-term cash investment and financing activities, giving rise to interest rate risk. The risk is managed by ensuring that surplus funds are invested to achieve maximum returns while minimising risk.

LIQUIDITY RISK

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, management aims to maintain flexibility in funding by keeping committed credit lines available.


72 \\ // 73




CREDIT RISK

Financial assets of the Authority, which are subject to credit risk, consist mainly of debtors and cash resources. The Authority has policies in place to ensure that as far as possible service provided on credit are made to customers with an appropriate credit history. Payment for other services are made in cash or electronic funds transfers. The Authority holds cash deposits with reputable financial institutions. The balances held with different banks as at the balance sheet

date are shown below.

2016 2015

Pula Pula

Income

Stanbic Bank of Botswana Ltd 28 341 271 8 934 043

Barclays Bank of Botswana Ltd 131 805 211 84 852 893

Cash on hand 22 255 23 265

160 168 736 93 810 201

CAPITAL RISK MANAGEMENT

The Authority is funded by the Government of Botswana. In managing capital, the Authority strives to provide maximum benefits to stakeholders at the lowest possible cost. There were no borrowings during the period under review.

FAIR VALUE ESTIMATES

Financial instruments consist of trade receivables, bank and cash balances and other payables resulting from normal business operations. The nominal value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.

O. INVENTORIES Inventory is valued at cost or net realisable value which ever is the lesser. The Authority held no stock items as at

31 March 2016. Consumables like stationery and cleaning materials are charged off in the accounts during the year for which accounts are prepared.

P. TAXATION No provision for taxation is required as Civil Aviation Authority of Botswana is exempt from taxation in terms of

the Income Tax Act (CAP 52:01).

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016

2016 2015

Pula Pula

1. GOVERNMENT GRANT

Annual Government Grant 159 486 530 143 432 140

159 486 530 143 432 140

2. FINANCE INCOME

Interest income - Banks 2 173 617 3 001 755

2 173 617 3 001 755

Finance costs

Interest expense - -

- -

Net interest income 2 173 617 3 001 755

3. EMPLOYEE BENEFITS EXPENSE

Salaries and allowances 183 467 837 150 230 966

Group insurance 1 164 431 2 174 770

184 632 268 152 405 736

4. SURPLUS/(DEFICIT) FOR THE YEAR FROM OPERATING ACTIVITIES

Surplus/(deficit) for the year from operating

Activities is stated after charging/crediting the following: 5 969 042 26 731 800

Remuneration paid to executive management 5 097 476 4 277 497

Accounts receivable impairment charges 3 774 033 9 172 809

Sitting allowance for Board members 44 350 60 123

Employee costs 197 268 332 154 516 330

Armotisation of capital grant 116 282 557 108 143 822

Depreciation on non current assets (120 206 399) (110 963 394)

Foreign exchange gain/(loss) 2 293 671 1 143 669

Stores, Spares and Consumables 10 549 447 10 912 414

Utilities 13 534 067 10 407 665

Repairs and maintenance 12 621 520 6 277 382

General office and administration 32 716 385 29 392 179


74 \\ // 75




Cost/valuation

Opening Balance

Transfer from Development

Expenditure Additions Valuation DisposalClosing

Balance

Pula Pula Pula Pula Pula Pula

5. PROPERTY, PLANT AND EQUIPMENT

31 Mar 16

Land 132 284 000 158 307 450 158 307 450

Buildings 3 358 408 016 318 487 4 117 520 985 4 117 520 985

Equipment 262 093 566 25 864 067 349 892 372 349 892 372

Furniture and fittings 6 195 360 247 239 4 925 275 4 925 275

Motor vehicles 30 094 449 3 089 589 38 889 520 216 000 38 889 520

Computers 4 688 537 548 698 6 783 335 6 783 335

Office equipment 35 704 870 50 329 35 468 710 35 468 710

3 829 468 799 - 30 118 409 4 711 787 647 216 000 4 711 787 647

Property, plant and equipment

31 Mar 15

Land 123 165 000 9 119 000 132 284 000

Buildings 3 279 355 867 79 052 149 3 358 408 016

Equipment 222 949 728 32 986 322 6 551 716 394 200 262 093 566

Furniture and fittings 5 634 319 580 441 19 400 6 195 360

Motor vehicles 30 336 321 974 628 1 216 500 30 094 449

Computers 3 805 140 924 059 40 662 4 688 537

Office equipment 35 337 824 371 846 4 800 35 704 870

3 700 584 200 32 986 322 97 573 839 1 675 562 3 829 468 798

The assets of the Authority were last valued for the period ended 31 March 2012. In accordance with IAS 16, the assets of the Authority were revalued as at 31 March 2016 by professional independent valuers, Aon Risk Management.


Accumulated Depreciation Net Book values

Opening BalanceCharge for

this year DisposalsClosing

Balance 2016 2015

Pula Pula Pula Pula Pula Pula

- - - - 158 307 450 132 284 000

223 580 979 76 404 819 - - 4 117 520 985 3 134 827 038

62 482 339 28 527 683 - - 349 892 372 199 611 227

2 013 507 1 214 386 - - 4 925 275 4 181 853

14 526 616 3 665 666 165 500 - 38 889 520 15 567 833

2 560 617 528 913 - - 6 783 335 2 127 920

8 088 335 2 743 615 - - 35 468 710 27 616 535

313 252 392 113 085 082 165 500 - 4 711 787 647 3 516 216 406

2015 2014

Pula Pula

- - - - 132 284 000 123 165 000

147 686 330 75 894 648 - 223 580 979 3 134 827 038 3 131 669 537

40 277 815 22 307 142 102 617 62 482 339 199 611 227 182 671 913

1 293 769 728 668 8 930 2 013 507 4 181 853 4 340 551

10 415 728 4 885 202 774 314 14 526 616 15 567 833 19 920 593

1 703 730 881 243 24 356 2 560 617 2 127 920 2 101 410

5 379 610 2 710 552 1 827 8 088 335 27 616 535 29 958 214

206 756 982 107 407 455 912 045 313 252 392 3 516 216 406 3 493 827 218


76 \\ // 77




2016 2015

Pula Pula

6. INTANGIBLE ASSETS

Cost at 1 April 49 273 018 25 883 723

Acquisitions during the year 22 170 955 23 389 295

Closing balance 71 443 973 49 273 018

Accumulated depreciation

Balance at 1 April 7 151 385 3 595 446

Current year charge 7 121 317 3 555 939

Closing balance 14 272 702 7 151 385

Net book value 57 171 272 42 121 634


2016 2015

Pula Pula

7. DEVELOPMENT EXPENDITURE

Balance at beginning of the year 28 124 908 23 943 207

Expenditure incurred during the year 175 690 244 44 002 318

Contract costs capitalised during the year - (32 986 322)

Contract costs written off upon capitalisation - (6 834 295)

Balance at end of the year 203 815 152 28 124 908


78 \\ // 79




8. AMORTISATION OF CAPITAL GRANT

The capital fund is made up of grants in the form of non current assets received from the Botswana Government. The non current assets received are listed below and the net book value of these assets also represents the net book value of the capital grant. Therefore the amount reflected as ‘Amortisation of capital funds’ refers to the depreciation charge of these assets for each respective year.

Cost/valuation

Opening Balance Additions Disposals

ClosingBalance

Pula Pula Pula Pula

31 March 2016

Property. Plant and Equipment

Land 123 165 000 123 165 000

Buildings 3 384 517 499 3 560 207 743

Equipment 222 255 368 23 697 075 245 952 443

Furniture and fittings 2 608 864 2 608 864

Motor vehicles 30 256 266 216 000 30 040 266

Computers 3 605 439 3 605 439

Office Equipment 34 634 964 34 634 964

Computer software 46 257 204 21 624 077 67 881 281

Capital Grant work in progress 27 976 000 175 690 244 203 666 245

3 875 276 605 221 011 396 216 000 4 271 762 245

31 March 2015

Land 123 165 000 - - 123 165 000

Buildings 3 277 532 625 106 984 874 - 3 384 517 499

Equipment 234 828 356 15 694 596 291 583 250 231 369

Furniture and fittings 2 619 334 - 10 470 2 608 864

Motor vehicles 29 723 824 974 628 442 186 30 256 266

Computers 3 614 427 - 8 988 3 605 439

Office Equipment 34 637 183 - 2 219 34 634 964

Computer software 23 007 460 23 249 744 - 46 257 204

3 729 128 209 146 903 843 755 445 3 875 276 606


Amortisation of capital fund: Net Book Values

Opening Balance

Charge for the year Disposals

Revaluation Loss

ClosingBalance 2016 2015

Pula Pula Pula Pula Pula Pula Pula

- - - 123 165 000 123 165 000

223 405 584 76 294 841 56 633 862 299 700 425 3 260 507 318 3 161 111 915

58 497 075 26 148 740 8 992 022 84 645 816 161 306 627 163 758 293

982 122 585 081 7 604 1 567 203 1 041 661 1 626 742

15 113 314 3 487 936 165 500 32 000 18 601 250 11 439 016 15 142 952

1 477 581 330 723 120 362 1 808 304 1 797 135 2 127 857

7 684 909 2 662 193 3 171 10 347 102 24 287 862 26 950 056

5 563 244 6 773 042 - 12 336 286 55 544 995 40 693 960

- - - 203 666 245

312 723 829 116 282 557 165 500 65 789 021 429 006 386 3 842 755 859 3 534 576 775

2015 2014

- - - 123 165 000 123 165 000

147 621 989 75 783 595 223 405 584 3 161 111 915 3 129 910 636

37 581 157 20 915 919 58 497 075 191 734 293 197 247 199

665 845 316 278 982 122 1 626 742 1 953 490

10 344 232 4 769 082 15 113 314 15 142 952 19 379 592

948 507 529 075 1 477 581 2 127 857 2 665 920

5 117 533 2 567 376 7 684 909 26 950 056 29 519 651

2 300 746 3 262 498 5 563 244 40 693 960 20 706 714

204 580 007 108 143 822 312 723 829 3 562 552 777 3 524 548 201


80 \\ // 81




2016 2015

Pula Pula

9 CASH AND SHORT-TERM DEPOSITS

Cash at bank and on hand 406 337 720 996

Short-term deposits with banks 14 805 461 5 964 280

Medium term deposits with banks 144 956 939 87 124 925

160 168 736 93 810 201

Cash at bank earns interest at floating interest rates on daily deposit balances. Short-term deposits are usually made for a maximum period of three months. The fair value of cash and short-term deposits is P158 497 929 (2015 : P93 810 201).

For purposes of the cash flow statement, cash and cash equivalents comprise the following:

Cash and cash equivalents

Cash at bank and on hand 406 337 720 996

Short-term deposits 14 805 461 5 964 280

Medium term deposits 144 956 939 87 124 925

160 168 736 93 810 201


2016 2015

Pula Pula

10 TRADE AND OTHER RECEIVABLES

Trade receivables 60 445 375 50 436 146

Provision for impairment - doubtful debts (31 919 080) (28 145 048)

28 526 294 22 291 098

Other receivables 2 564 998 958 139

31 091 293 23 249 237

Prepayments 11 269 233 4 358 027

42 360 526 27 607 264

The fair values of accounts receivables are as follows

Accounts receivable 31 091 293 23 249 237

Prepayments 11 269 233 4 358 027

42 360 526 27 607 264

Movement on the provision for impairment of accounts receivable:

As at 1 April 37 067 186 27 894 375

Provision for impairment 3 774 033 9 172 809

As at 31 March 40 841 220 37 067 186

The ageing of trade receivables at the reporting date is analysed as follows:

Current 9 640 066 8 355 310

Past due - 60 days 9 216 075 6 624 837

Past due 61 - 120 days 10 121 495 3 159 543

Over 120 31 032 073 31 778 068

60 009 709 49 917 758


82 \\ // 83




2016 2015

Pula Pula

11 TRADE AND OTHER PAYABLES

Trade payables 22 032 064 16 952 687

Other payables 32 896 015 41 118 311

54 928 079 58 070 998

Trade and other payables are non interest bearing and have an average term of 30 days.

12 DEFERRED INCOME - GOVERNMENT CONTRIBUTIONS

Balance at beginning of the year 20 797 606 37 838 701

Contributions Received 251 480 220 27 742 172

Contributions Paid (173 845 008) (44 783 267)

98 432 818 20 797 606

13 COMMITMENTS AND CONTINGENCIES

The Authority entered into commercial leases on office premises. The lease period is five years with an option to renew. Future minimum rentals payable under non - cancellable operating leases as at 31 March are as follows.

Premises

Within one year 4 484 843 4 271 279

Within two to five years 7 381 604 11 866 447

11 866 447 16 137 726

14 COMPENSATION OF EXECUTIVE MANAGEMENT

Basic salaries and allowances 5 097 476 4 277 497

5 097 476 4 277 497


2016 2015

Pula Pula

15. RELATED PARTY DISCLOSURES

All related party transaction balances are non-interest bearing. The following transactions were carried out with related parties.

Grants from Government of Botswana 159 486 530 143 432 140

Compensation of Executive management

Salaries and benefits 5 097 476 4 277 497

Board of Directors fees 44 350 60 123

5 141 827 4 337 620

Amounts included in Trade Payables regarding related parties

Air Botswana 637 992 429 035

Be Mobile 38 087 46 749

Botswana Power Corporation 3 012 727 981 474

Botswana Post 23 913 37 013

Botswana Telecommunications Corporation 341 225 625 012

Water Utilities Corporation 392 991 599 023

4 446 935 2 718 306

Amounts included in Trade Receivables regarding related parties

Air Botswana 8 012 926 7 942 127

Botswana Government 1 702 841 1 386 757

Botswana Unified Revenue Services 644 052 646 820

Botswana Tourism Organisation 58 734 53 514

Botswana Telecommunications Corporation 25 684 88 340

Botswana Post 153 814 37 069

Botswana Development Corporation - 23 867

10 598 050 10 178 493

Amounts due include amounts due from Government departments (Botswana Police, Department of Immigration and Department of National Museums).


84 \\ // 85




16. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Exposure to interest risk and credit risk is experienced in the normal course of business. However, the Authority does not hold or issue derivative financial instruments for trading purposes which are more vulnerable to such risks. Instead, the Authority’s principal financial liabilities comprise trade and related party payables. The Authority also has various financial assets such as receivables, cash and short-term deposits, which arise directly from its operations.

17. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of financial instruments are identical to the carrying values reflected in the balance sheet. The table below summarises the information on fair value of financial instruments. No valuation method has been used to measure the fair values since the carrying amounts approximate the fair values.

2016 2015

Pula Pula

18 FAIR VALUE OF FINANCIAL INSTRUMENTS

Carrying amount

Fair value

Pula Pula

At March 2016

Financial assets

Cash at bank & on hand 15 211 797 15 211 797

Short & medium term deposits 14 805 461 14 805 461

Trade and other receivables 42 360 526 42 360 526

72 377 784 72 377 784

Financial liabilities

Trade payables 54 928 079 54 928 079

54 928 079 54 928 079

At March 2015

Financial assets

Cash at bank & hand 6 685 276 6 685 276

Short & medium term deposits 5 964 280 5 964 280

Trade and other receivables 27 607 264 27 607 264

40 256 820 40 256 820

Financial liabilities

Trade payables 58 070 998 58 070 998

58 070 998 58 070 998


Loans and receivables

Financial liabilities at

amortised cost

Total

Pula Pula Pula

19 CLASSIFICATION OF FINANCIAL INSTRUMENTS

At March 2016

Financial assets

Cash in hand 15 211 797 - 15 211 797

Short & medium-term deposits 14 805 461 - 14 805 461

Trade receivables 42 360 526 - 42 360 526

Financial liabilities - - -

Trade and other payables - (54 928 079) (54 928 079)

72 377 784 (54 928 079) 17 449 705

At March 2015

Financial assets

Cash in hand 6 685 276 - 6 685 276

Short & medium-term deposits 5 964 280 - 5 964 280

Trade receivables 27 607 264 - 27 607 264

Financial liabilities - -

Trade and other payables - (58 070 998) (58 070 998)

40 256 819 (58 070 998) (17 814 178)


86 \\ // 87




2016 2015

Pula Pula

20 REVENUE

Aeronautical

Enroute navigation charges-Scheduled 57 120 102 46 944 565

Landing charges 8 027 357 8 089 092

Parking charges 641 550 631 103

Enroute navigation charges-Non Scheduled 5 297 998 5 039 938

Passenger service charge 30 073 751 30 775 268

101 160 757 91 479 966

Non Aeronautical

Regulatory Charges 1 835 833 1 626 842

Other Airport Income 15 579 875 16 069 585

Unrealised gain (Loss) - 755 445

Foreign exchange gain/(loss) 2 293 671 1 143 669

19 709 379 19 595 541

Total Revenue 120 870 137 111 075 507

21 STAFF COSTS

Salaries and allowances 183 467 837 150 230 966

Group insurance 1 164 431 2 174 770

Uniforms 1 568 148 312 741

Training and seminars 3 376 534 1 889 693

Traveling and subsistence 7 691 381 4 185 656

197 268 332 158 793 826


2016 2015

Pula Pula

22 OTHER OPERATING COSTS

Stores, Spares and Consumables

Motor vehicle expenses 5 707 697 6 049 946

Consumables 4 841 750 4 862 469

10 549 447 10 912 414

Utilities

Water charges 2 173 097 1 769 791

Electricity 11 360 969 8 637 874

13 534 067 10 407 665

Repairs and maintenance

Equipment, furniture and others 7 382 591 4 182 904

Roads, pavements, buildings and others 5 238 930 2 094 477

12 621 520 6 277 382

General office and administration

Printing, postage and stationery 1 596 139 1 586 574

Communications expenses 5 249 239 4 141 381

Office rentals 4 271 639 4 150 447

Advertising and publicity 2 422 941 634 424

Subscriptions 1 297 793 1 240 292

Legal and other professional fees 4 173 673 9 023 833

Board sitting fees 44 350 60 123

Security 3 341 711 3 005 785

Foreign exchange loss - -

Depreciation of non current assets 120 206 399 110 963 394

Provision for bad debts 3 774 033 9 172 809

Insurance 5 556 562 4 367 398

Revaluation expense 2 137 376 -

Sundry administration expenses 2 624 962 1 181 921

Impairment Loss - -

156 696 817 149 528 382

Total other operating costs 193 401 850 177 125 843

Total operating expenses 390 670 182 335 919 669


88 \\ // 89

NOTES NOTES

PROVIDER OF EFFICIENT AND EFFECTIVE AVIATION SERVICES

// 9190 \\

Provider of Efficient and Effective Aviation Services

Documents

Provider of Efficient and Effective Aviation Services · Conventions on aviation security to which Botswana is party and includes measures to address new and emerging threats against